Why do you hear investing a lot?
The Big Mac hamburger you eat today is it the same price as 3 years ago? 5 years ago? 7 years ago? The answer is very likely to be a NO. It means that the money you have today is going to have lesser value in future, so does the saving.
That is why we need to look into investing NOW.
What is investing?
Investing is a way to potentially increase the amount of money you have. The ultimate goal is to produce income or profit. There are many financial instruments in the market from the traditional ways of blue chips, ETF, mutual funds, gold, silver, oil to the innovation one like equity crowdfunding (ECF), P2P lending, crypto currency.
All of these financial instruments would require understanding before we start investing. Investing without knowing the product is just equivalent to gambling. The difference between ending value and capital would be your gain. It could take time to generate.
Who should invest?
Most people might have the wrong perception that they need to be an expert in personal finance or come with an academic background related to accounting or finance, only then to start investing. Everyone needs to learn how to invest, as it is the best way to build wealth over time.
Investing best learns through experience, through consistent years of effort. Starting investment at a younger age gives advantage because you have years to understand the market and learn from your mistakes. The experience gained from mistakes is invaluable. There is no shortcut to financial success, it requires effort and time.
Thus, there is no perfect time to start investing. Some people start at college time, some at 20s, some at 30s, or even 40s. It does not require a big sum of capital to kickstart, even if it is just $100, you can chip in for a mutual fund. Before you buy into any financial instruments (blue chip stocks/ mutual fund/ crypto currency etc), equip yourself with the product knowledge. Never buy something that you do not know and understand.
When is the right timing for investing?
The earlier you start investing, the better return you can get – compound effect
According to Einstein, “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” In short, this magic transforms small money that you might not be noticing, into a large snowball.
You have probably heard it many times – if you are not investing yet, you should start soon, in fact, NOW.