10 Reasons Why You Should Start Investing Immediately
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Investing early in life is a smart financial move for building long-term, steady wealth. With investing, your money can grow through various means, including stocks, bonds, real estate, or anything that yields a high return on investment (ROI). In turn, you build a solid financial portfolio while helping you outpace inflation and achieve goals like retirement, buying more assets, starting a business, and more.
Indubitably, time is money when it comes to investing. Hence, it would be best to begin evaluating your financial needs and options as soon as possible because there are some worthwhile investment opportunities you can jump on. Below are ten reasons to begin investing ASAP:
1. Earn More Money
Of course, one of the most desirable traits about investing is its earning potential. Investment vehicles like bonds, stocks, real estate or even precious metals can help you substantially increase your wealth in the long run. Things like investment returns or the price of an asset or investment are important factors here, as they will directly determine whether or not you lose money in the market. Generally, stocks will return 7% – 10% a year; the older they are, the more money you will make. Remember, your stocks are subject to market volatility, and profits can vary from year to year.
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Compound interest is on your side and makes things even better in terms of investing as early as possible. The longer your money is invested, the better the chance of it growing to the highest extent.
2. Save for Retirement
Saving for a retirement fund is one of the more popular reasons people invest. Whether you have a 401(k), IRA, or pension, investing in the stock market over time will bolster your wealth and allow for a more comfortable retirement. Plus, companies like TD Ameritrade offer Retirement Accounts that allow for various investment choices like a Traditional IRA, Roth IRA, Rollover IRA, and others while lending you greater control over your finances.
3. The More Time You Have to Invest, the Better
If everyone started investing at the age of 11, like Warren Buffet, we’d all be better off. Of course, most of us don’t start investing until adulthood, often in our late 20s or 30s. However, the earlier you start, the more room you have to make riskier investments and take financial hits. You’ll have more time for your returns to bounce back, and you won’t be scrambling upon your retirement to recoup sunken investments.
4. Compounding Interest
Time and compounding interest go hand-in-hand. While it’s an utter nightmare if you’re struggling to pay off debt, it’s a financial beacon for those who invest. How it works boils down to this: your money will make money on its money. So, if you invest $10,000 and earn a 10% return one year, you’ll make an extra $1,000 on that original $10,000 you invested, leaving you with $11,000 total. Or, say you don’t invest any more money into that account. With compounding interest, you’ll still make money on that $11,000 and see a return the following year despite not investing more money. See why investing early is starting to sound like a better and better idea?
5. Diversify Your Assets
Keeping all your money tied up in one asset is a bad financial move. If one economic lifeline implodes for one reason or another, your options for recovering those losses are minimal. When you diversify your assets, however, you can spread risk and potentially earn higher returns. You can distribute your wealth across things like your retirement, house, stocks, and bonds, or business.
6. Decrease Taxable Income
For those who despise taxes, investing may be an excellent idea for you. Some of the wealthiest people in the world know that making your money investing is far better than making it from working from a tax perspective, and many leverage this strategy to increase their capital gains. The taxed income from investing is far less than what one would pay from working, and there are also opportunities to invest in accounts with unique tax advantages like a Roth IRA, which allows you to make a tax-free withdrawal from your retirement money. In some cases, you can invest your money so that it won’t count as taxable income in that year.
7. Philanthropy
For those who want to invoke impactful changes in the world, investing in a cause you believe in or support is a great way to invest your money. Money can help in solving many problems in the world, from homelessness to chronic disease research, while driving real change concerning the environment, the arts, education, and more. Investing in philanthropic causes isn’t necessarily about getting a financial return, it’s normally done in a desire to support a charitable organization that operates in something you care about.
8. Gain Better Control Over Your Finances
Your primary goal for investing should not revolve entirely around getting rich. It is more about having a comfortable retirement, an emergency fund, and a financial safety net that promotes longevity and financial stability, all resulting from smart investment choices. Relying on a steady paycheck from your job can only get you so far, and making intelligent investments can cushion your retirement and even allow you to retire early if you’re successful.
9. Get a Head Start on Inflation
Anyone who watches the news may be familiar with the term inflation, but for those who like to consume more uplifting content in their free time, it refers to the fact that the cost of goods and services increase over time. It occurs due to worldwide economic conditions, and nobody is safe from it. That is, until you begin investing.
Investing, as opposed to traditional saving, can outpace inflation because the interest rates on investments exceed inflation growth. Whereas traditional savings accounts only yield a small percentage of your deposit money. So, if inflation is at 3% and you’re earning 8% in interest on your investment, you’re keeping pace with your financial goals and avoiding the financial setback that inflation can result in.
10. Online Platforms Make it Feasible for Anyone to Get Started
TD Ameritrade is a highly recommended brokerage that offers various investment services, including online trading of stocks, options, mutual funds, and ETFs. With TD Ameritrade, investors have access to the top technology products, tools, and educational resources to maximize their investment opportunities best.
The highly rated trading platform offers several online brokerage accounts to open with them, complete with a comprehensive range of investment opportunities, including standard accounts with access to intuitive trading platforms, retirement accounts with various IRA options, and education accounts and specialty accounts with high flexibility and ease of use.
Offering transparent pricing, a wide range of diversified investment choices, and top-of-the-line customer service, TD Ameritrade empowers you to take the stock market head-on regardless of your investing experience.
