jinijALL ABOUT THE MONEY!
Investing While Your Young
Investing is a scary subject for many, especially young adults. As young adults, we want to enjoy life and saving and investing is usually the last thing on our minds. Ironically, it is the time we should be investing heavily and planning for retirement. A little thing called compound interest can turn $50,000 into over $1.5 million in 30 years time. This is the biggest advantage young adults have when it comes to finances.
Almost any form of long term investments is good for young adults and the amount they have to invest is small compare to older folks. A 25 year old can more than triple their initial investment in 30 years, without adding another dime to it. Imagine if are 25 years old and you invested $20,000 into an account bearing 4 percent interest monthly. In 30 years time you would have somewhere around $65,000 in your account and you don’t have to invest another dollar. Now imagine if you invested another $50 monthly for the next 30 years, that would be somewhere around $100K. Over the 30 years time, you would have only added $18,000 for a total of $38,000 invested and a profit of $62,000.
The reason more young adults fail to take advantage of this powerful technique, is simple lack of knowledge. They do not know it exist and how powerful it is. We usually learn this later in life and try to play catch-up, but time is something we can never get back. I have said before that personal finance should be a mandatory part of every high school, but it is not. It is left up to parents to teach their children about saving and investing, but most parents know just as much as their child. It is an easy subject to grasp and with extensive resources to help you learn and it is available to all young and old.
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