Why Today Is The Best Time To Start Investing

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If you wish to accumulate wealth, you may have considered investing. Investing is putting your money in financial vehicles that have the potential to provide strong returns. While there are a plethora of investment options that can keep you paralysed from starting, today we’ll explore a $227 209 reason why today is the best time to begin.

 

Even though markets can fluctuate, one of the best financial powers we have in our favour by starting today, rather than a year from now – is time. Albert Einstein once said that compound interest is the eighth wonder of the world. Likened to that of a building snowball, compound interest has a steady growth effect, where a little upfront effort and investment pays in exponential dividends the longer you allow it roll out.

Source: Medium

While there may be many get rich quick schemes around, the ultimate way to build and multiply true wealth is to allow your money to work for you. With our example with compound interest, you’re rewarded with your interest earning you more interest. The downside to this effect: the longer you wait to begin, the harder it is to catch up.

To demonstrate, Simply Investing laid out this scenario: Jane decides at 25 years old to begin investing, while John waits until 34.  

Name: Jane

Age: 25

Invests: $2,000 each year

Invests for: 10 years

Total amount invested: $20,000

At 10% annual growth, by the time she is 65 her investment is: $556,197

 

Name: John

Age: 34

Invests: $2,000 each year

Invests for: 30 years

Total amount invested: $60,000

At 10% annual growth, by the time he is 65 his investment is: $328,988

By comparison, John contributed three times the investment ($60 000 to Jane’s $20 000), but has $227 209 less at the age of 65. This highlights the impact of starting now, as even by investing more later on, acting early far outperforms.

 

What To Do

While this scenario is just an example of many financial vehicles, you can use to build wealth, you’ll discover that by utilising the power of time, your investment choices will have the greatest head start at earning a reasonable return.

For this reason, the second best time to start investing is today. Not tomorrow. Not a week from now. Even the smallest dollars snowball and stand the test of time. Ten years ago would have been the best time to decide to invest. But today you can do something that your future self will thank you for.

If you’re ready to begin your investment journey or want to consult an expert on your current portfolio, our team of experienced professional advisors who can work with you to create a tailored, financial plan. Book in a call with our team today on 1300 784 084.

 

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Dane Jansen
Dane is a Managing Partner/Responsible Manager at Positive Dynamics. He embraces his leadership skills to provide guidance to his clients giving them the confidence and conviction to achieve financial success.
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