Start Investing When You’re Young

by Pam on October 16, 2009

start investing when you're youngThis is written especially for those of you who have just finished high school or university.  I highly recommend that you start to tuck some money away for your future.  Whether you want to save up for your first home, a trip around the world, or for retirement, the time to start saving is now.  I know it’s hard to be thinking about retirement when you’re so young, but believe me, time goes by really fast and before you know it, you will be thinking about your retirement plans.

If you’re like me, you ignored this advice and didn’t start saving until your mid 20s.  Although it’s better than nothing, it’s ideal if you start paying yourself first when you’re young.  I emphasize this because your investments’ growth potential increases dramatically the longer you keep your funds invested.

For example, if you invest $10,000.00 when you’re 18 years old and don’t touch it until you are 65, assuming an average rate of return of 7%, the value of your investment will be around $240,000.  By contrast, if you invest the same amount at age 25, assuming the same rate of return, the value at age 65 will be approximately $150,000.  So, by investing 7 years earlier, the end result is about $90,000 extra dollars in your pocket at retirement.

Although it may seem difficult or even impossible to start saving for retirement at such a young age, I can guarantee that it is worth it and you won’t regret it.  Many financial institutions will allow you to start investing with a minimal amount of money and then you can continuously build up your accounts by setting up preauthorized payments that are within your budget.

You don’t have to have a lot of money to start investing.  Don’t put it off until you are older.  It’s time to start investing today as the more time you spend in the market, the more growth you will see and the more likely you will be able to achieve your goals.

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