WHY YOU SHOULD START INVESTING EARLY?

One of the most important factors to consider while drawing a financial plan is fixing the time period, especially if you are a beginner. The thumb rule is, the earlier you start, the greater the chance of achieving your financial goals. Having the advantage to grow your investments over time, and putting your investments to work for you, will help you live the life you ultimately want to.

It is time tested that if one starts investing early, the percentage of building the corpus for one’s desired future financial goals is higher as compared to those who start very late in their life.

Investing according to financial goals.

Identify and prioritise goals:

The first step in goal based investing is identifying and prioritising goals by segregating them into needs and wants – needs are essentials and hence get precedence over wants, which are desires and aspirations. Once decided, align your needs/wants to the time horizon.​

Explore the systematic method of investing in mutual funds​

​​Investors can also benefit from the systematic plans offered by the mutual funds. For instance, a systematic-investment plan (SIP) is used for wealth accumulation. A systematic-transfer plan (STP) helps in transferring wealth from one asset to another, in safeguarding the portfolio against volatility, and in adapting to the changing risk appetite with age and increase in responsibilities. Lastly, a systematic-withdrawal plan (SWP) is useful in deriving a regular income from the created wealth created.​​​​

Power of Compounding

Young investors have an advantage in investing since the longer you stay in the market, the less risky your investment becomes and the more corpus you can generate over a period of time. This happens because of the compounding effect and the rupee cost averaging benefit you get over a long term.

Once you are done with prioritizing your financial goals of life, quantify them, that how much amount you may need to achieve those goals and based on that choose mutual fund schemes. So give wings to your dreams and start investing in something each month to achieve your goals without any burden of heavy debt on your shoulder.

Investing at any age isn’t easy, but waiting to invest for when it’s convenient isn’t the best approach (because it’s never going to be easy). Don’t fall into the I-need-a-lump-sum-of-cash-to-start-investing trap start small, with whatever you can afford to invest today because it’s most likely going to be worth more tomorrow.

Keep in mind, the market goes up and down, much like our emotions, and that means sometimes your investments will fail. Still, in the long term, investing early and giving your investments time to mature will help you come out ahead.

Finally, you don’t have to be an expert to invest. Find yourself a traditional advisor like us who will do the legwork and guide you in the right direction. 

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