Investing is something that many people consider but very few do it. It is one of the best methods for preparing your financial future, whether it’s saving for a house deposit or contributing money to your pension fund.
As soon as you have the idea of investing, you should do it. The reason for this is that the longer you invest, the more you have at the end of it. However, you can only do this when you have the disposable income to invest.
Why Should You Invest Sooner Rather Than Later
A key tip before you invest is that you should have around 3-6 months of savings in your easy-access savings account. Once you have a backup fund, then you can invest your money into an investment pot.
If you invest your money and don’t take anything out, you will see a significant increase in five years. However, if you invest your money for longer than this, you will notice a much greater increase. The longer you leave your investment, the more your investment will increase.
There are many apps and websites which allow you to invest with very little budget as well. It is something that many people are unaware of and that is why they don’t invest. However, if you invest as little as £20 per month, you can see a very small but valuable increase in your investment portfolio. It can add up over time and when you have more money to invest, you can.
How Old Do You Have To Be Before You Invest
Many young people hear the idea of investing and want to start imminently; however, you can only do this when you are 18. Nevertheless, parents can invest in their children as they can open a Junior ISA or a pension. However, if you are a junior, you must wait until 18 before you can open an investment account.
Grow Your Wealth By Investing
The reason why you should invest is very simple to grow your wealth. Additionally, if you start investing in your twenties, the wealth that you have in your 30s will be significantly more compared to if you didn’t.
The reason why people advise investing earlier is because it grows much quicker over long periods in comparison to a savings account, even when the interest rates are high for them.
Make Sure You Research Before You Invest
A mistake many people make before investing is that they need to remember the key part and that is research. To be good at anything, you need to research and that includes investing. Investing into a stock with no research and just because it has a name you know means you are betting, not investing.
Research takes time and time is money but, the more research you put in, the more your investing account profits. It is simple maths yet many people need to remember this.
It is important to remember that your investment can decrease as much as it can increase. That is why you need to ensure you are investing in the right companies or else you could lose that money.
Money decreasing doesn’t happen when it is in your bank account unless you spend it. So that might be a viable option, right? Wrong, savings and bank accounts don’t counter inflation like an investment account does.
If you do not want to spend time researching before investing then you don’t need to. However, if you are not going to research, use a robo-advisory app instead. This will be far more beneficial to you as it does all the hard work for you. All you need to do is pick an investment portfolio (these will have different risk levels) and you are set. Ideally, you need to pick a portfolio that aligns with your goals so make sure you read the benefits of all portfolios before investing.
Final Opinions
As you can see, the sooner, the better to open your investing account, no matter what your goals are. It doesn’t matter whether it is trading bitcoin or investing in the stock market. However, if you are saving for a new computer or a holiday, your money will be better in a savings pot. That way, you can save a lot of money and won’t be affected by the fluctuations that stocks have.
If you are saving for a house deposit or putting money towards your retirement, opening an investment account and investing in stocks will help that. If you want to be wealthy in your later years, you need to invest, it is as simple as that. If you don’t invest, you have to hope that your job will pay for your retirement.
Before investing, remember to read before you invest, especially with the stock market. Ensure that you also invest with a regulated broker as you could be a victim of a broker scam. Be wary about each investment and don’t invest unless you know enough about the company. Question what they do and why they are a good company to invest in. Good luck!