Life is uncertain. It can be one moment up and next moment down. Due to unpredictable nature of life, the decisions you take in the early stage may have an evident effect in the later stage of your life.
If you are spending your life without giving a proper thought to your earning, you may get worried as your retirement gets closer. Life runs faster than you anticipate. Within the blink of an eye moments pass by and quickly you will be counting the days left to your retirement.
Considering the recent economy and the nature of available jobs, you need to be very vigilant in planning the life you’ll spend after retirement. You can minimize the danger of living uncertain life by proper planning and valid decisions.
Things may turn worse if you delay in giving the right direction to your life. Tomorrow is never guaranteed. Today, right now, right away is the correct time to take actions and give your life a sound start. People who start proper planning in their early stage of their career tend to fulfill their desires later.
The point is not getting too much frugal, but wiser in spending on your needs and requirements of daily life. Following are the things you should consider for early investment so you may enjoy the happy moment of your retired life.
Saving is Earning:
Saving is earning. Yes, I jotted down my thought in words and you read that right. How? If you take your personal needs into consideration, you will come to know there are the areas where you are spending more than it requires.
Although it is quite difficult to save in the early stages of your career – you definitely want to hang out with friends, there are student loans haunting you with their mouth wide open, you need to spend money on buying gifts for your girlfriend unless you are a lone wonderer like me 😉 But some wise decisions can turn your life around. There is no point of putting aside thousands of dollars too early, but you can start with baby steps.
Saving $50 dollars per month is not a big deal. You’ll be able to save more as you proceed. When you have a thought you need to put aside $50 dollars every month anyway, your expenses will automatically cut short.
Invest Early to Spend More Later:
The sooner you start investing, the better. With the introduction of revolutionary technologies in the medical field, now people tend to live longer than ever. The study shows, the possibility of living of average man after retirement is 30 years. You would not want to spend that life in regrets of not fulfilling your desires.
The people who retire now have more things to do than the previous groups. Instead of living the life in the separate room, retirees now intend to travel, follow their hobbies and pursue the interests that require financial resources.
Investing in the early 20’s will create a proper financial balance and you’ll end up meeting your daily needs and requirements in the later stage of life.
Take Risk to Get Big:
If you are not risking now, you are risking the whole of your life. Taking a risk of investment in the early 20’s or 30’s pays off in the long run. Instead of living cautious and fearful live, you need to take your life one step ahead of your peers.
More often than not, the formula of investing only works if you invest early. Because, if you invest early, you will have more years inline to invest before retirement. If you invest late, you will end up with minimum opportunity to save and budget your finances.
Benefits of Compound Interest:
What is compound interest? It is interest on your investment with interest. Suppose a person invest $1000 with 10% interest rate annually. He will be able to get $1100 after one year. Now, he gets the %10 interest of $1100 in the upcoming year, and it goes same with every investment. It means your amount is increasing exponentially with every passing year.
Investing less in the early stage of life has more benefit than investing huge later. Suppose A person invests $200 in his 30’s with an interest rate of 10% and it continues for 30 years. And person B invests $1000 in his 50’s with interest rate of 10% and it continues for 10 years. Person A will be able to get $398,277.54 at the age of 60. Person B is able to get $193,842.84 at the same age.
Start saving today as tomorrow is never promised. The idea of investing might be draining in the start but you will get full control over your finances with the passage of time.
It totally depends on you how you plan your budget – rest assured investing early eventually pays off in the long run. With proper planning and wise approach, you will definitely be able to achieve your financial goals.