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Investing in Your 30s or 40s: Here’s What You Need to Know

August 25, 2021 | Financial Planning

3 Huge Benefits of Investing While You’re Still Young

When it comes to investing, one of the questions we often hear is “When should I start?”.

While there is no perfect age, our golden rule is the earlier, the better.

When you are young, building an investment portfolio may seem daunting but there are so many benefits that you will be able to enjoy in the short and long term.

Age shouldn’t be a barrier to anything and you are never too young to start planning for your future. Plus, if you have a young family to provide for, smart investing can provide some much-needed financial stability.

Here are four reasons why you should start investing while you’re still young:

1. You Have the Advantage of Time

Investing at a young age can give you a huge advantage over other people who start much later on because of the concept of compounding – a process of growing your investment returns by reinvesting your earnings.

In a much simpler sense, it allows you to generate more money through accrued interest.

While many Australians only start investing so they can secure their retirement funds, the truth is it’s best to start investing younger rather than at age 60 when you only have a short while to let your money grow.

The earlier you invest, the more money will be in your pocket later on in your life and for your retirement. This proves that what matters most in creating wealth is not how much you’ll invest but how long you’ll be investing.

2. You Have More Freedom To Take Risks

All investments come with risk. Investing and wealth creation should always be approached with a long-term focus.

It is natural for markets to fluctuate so you shouldn’t let this deter you from investing or scare you into making impulse decisions.

However, when you are younger, you may be able to take more risks.

Investors who are approaching their retirement may decide to take a more conservative approach. This is because they may need to rely on the money from their investments to fund their lifestyle. Therefore, if they had a risky investment, they have less time to recover from the potential losses from market fluctuations.

But if you have time on your side, you may be comfortable taking more risks with the knowledge that your investments are likely to bounce back over time and you can rely on the money to fund your retirement.

As a young investor, you have the opportunity to build an aggressive financial portfolio that stands to produce more significant gains in the long run so you can achieve financial security.

3. You May Have the Choice To Retire Early

One of the biggest benefits of early investing is having a robust retirement plan that secures your financial independence. This may even mean that you have the option to retire earlier than the average age of 65!

A diversified investment portfolio could give you the financial freedom and security you need to enjoy your dream retirement.

While retirement may not be at the front of your mind now, by starting your investment and retirement plan today, it could help you have more freedom and opportunities for your future.

Want to Invest Smartly?

Investing is not an overnight, get rich quick scheme. Smart investing takes patience, knowledge, and time.

Coastal Advice Port Macquarie is a reliable and experienced team that offers personalised financial advice to clients who want financial freedom and security. Our team of independent financial advisers in Port Macquarie provides a range of financial services, from retirement planning to wealth management.

If you’re looking for financial planners to help you develop effective wealth-building strategiesgive us a call today!

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