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Explained: Advantages of Investment at an Early Age

17 September, 2019

The earlier you invest, the richer you get!

Perhaps, the quote might sound a bit exaggerated but holds true in the present world as the amount of money you will put into investment, will get you immensely rich dividends in future.

Several financial experts, time and again, have debated over the topic of 'what should be the ideal age of investment' and each time they came up with an unanimous conclusion that early 20s are the best years to start investment. It could be that some individuals finish their graduation by mid 20s but they can start investing in stock market while still in studying phase. The first and foremost thing that investment teaches an individual is discipline and abatement of financial dependency on parents, guardians and other family members. It also makes a person aware about the difference in saving and investment. Though, a few orthodox and traditional folks might be skeptical and could demotivate youngsters but one should be wise enough to make a decision. Below are the few benefits of starting an investment at an early age:

Explained: Advantages of Investment at an Early Age

1. Secured Future: Life is uncertain and no one knows what might happen next moment, leave alone next week, next month and next year. Sometimes, emergency situations arise in life which requires urgent money to face the inescapable circumstances. But, if you have started investing from a young age then it will not at all be difficult for you to face these unavoidable circumstances. The investment amount will come to your rescue and the need of asking for money from family, relatives and friends will not be there. A person could use the sum invested years back in such situations easily without troubling other people.

2. Accentuate Savings: With investments starting at an early age, one can save more and gradually it develops into a habit. The habit leads to increase in investment with time, and hence the person is able to save a decent amount by the retirement age. It also makes an individual aware of avoiding unnecessary expenses and put that amount into investment.

3. Enhances Risk Taking Ability: Well, an array of researches conducted state that young people tend to take more risks than older ones. The aged peeps refrain from high-risk and big-return investments while a lot of people in their prime youth are drawn towards such investments, making the proverb "Bigger the risk, bigger the rewards" a reality. Hence, investment at a young age in such high-risk stocks pays rich dividends to an individual.

Read Also: Why One Should Start Investing In The Stock Market?

4. Increased Recovery Time: During the investment at an early age, if an individual incur losses then he/she still has ample time to recover and consolidate them. On the other hand, if an individual starts investing at an older age, then the stakes are rather low as far as recovery in case of a financial loss is concerned. Therefore, early investors get sufficient time period to recover their losses.

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