Investing can be a daunting prospect for anyone, but for millennials and young people it can be even more scary. At their young age, they may be more focused on rent, loan payments or student fees and as a result it can be easy to put the opportunity to invest off to the side.
There are, however, plenty of reasons why millennials should look to start their journey into investment. Aside from being a valuable learning tool for money management in their later years, it can also provide significant monetary backing, should you play your cards right.
With a survey revealing that 56% of millennials do not have any money stored away for retirement, in addition to less than a quarter being financially literate, the need to educate young adults on investment opportunities is more real than ever.
Of course, if it does seem daunting, you don’t need to worry; plenty of places like Learn to Trade will help you jump into the world of investment and trading with plenty of strategies and video courses to suit your needs.
1. It’s much easier to take risks
Due to taking on ventures with a larger return, it can be easier for older investors to be a little more hesitant should your chosen market takes a downward turn. You’re also young enough to recoup small losses over the life of your investment period, provided you don’t let them build up into something damaging.
2. A small amount can go a long way
Despite younger people perhaps not having a lot of money to spare for investments, the best part is even a small amount can start accumulating. By investing small amounts of your earnings in regular intervals you can build up quite a solid portfolio of investments.
Even bank accounts accruing compound interest can help create decent income, so it’s wise to start early.
3. Much easier to learn from your mistakes
Why wait for a significant financial error to learn about proper investment techniques when you can learn ahead of time and be prepared? The ability to be ahead of the competition is invaluable in most markets, and even just learning about improper spending at a young age can help you save valuable money.
This is especially helpful when you earn money from working long hours, so take advantage of your income when you can and reap the benefits.
4. You could potentially retire earlier
This is obviously further down the line, but by putting aside small amounts now, you can potentially retire much earlier. As one of the most important periods of financial stability, starting now can help you reach your goal in record time.
It may seem tough, but financial analysts suggest you should save approximately 15 to 20% of your monthly wage and put it towards a retirement fund. By starting early, you avoid the risk of falling into the trap of saving for other significant expenses too, such as a car or a house.
5. More time to accumulate and diversify
By starting in your 20’s instead of later in life, you’re more likely to accumulate a variety of investments, and this diversity of investments can be crucial at a formative age. While some will be conservative and others aggressive, the entire process will be of huge benefit in the long run.
As with any major investment or financial undertaking, you should consult with financial advisors regularly to see what course of action is right for you. No investment will provide benefits overnight, so start small and reap the benefits of investing early.