There are many advantages to investing while we’re young. There isn’t a specific best starting age though because our circumstances vary. I started at 21 because that’s when I got my first real job and started making money. It’s only been a few years but I can already see lots of benefits of investing in my twenties rather than putting it off.
- Time – Compound interest is very powerful. “Time is money” after all (゜∀゜)
- Tech Know-how – Technology can make investing more convenient. The younger generation tends to adopt new technologies faster.
- More Risk – There is a lot of future earning potential to cover any short term losses when we’re younger. I have the physical ability and patience to withstand a depression so I can afford to put more money into the stock market and ride out any volatility.
- More options – We tend to take on more responsibilities as we mature and grow. Today I can invest in myself by studying abroad, travel to find other opportunities, and use my time and money however I want, even start a small business if I want to. But in the future I have to be more responsible with my time and money, especially once I have a family.
- Energy– Pulling all-nighters researching stocks, working over-time, taking on multiple jobs, reacting quickly to market sentiment, and recovering faster from fatigue. These things become harder to do as we age.
- Exposure to Global Events – By being involved in making investment decisions we can better understand our surrounding economy. Corporations have a major influence on the world we live in, so understanding companies means understanding society, so we can make better decisions than other young people who are not so informed. Exposure to corporate finance may lead us to discover what jobs are currently in demand, for example.
- Planning for Life’s Situations – Planning today makes life easier tomorrow. We can invest in a life insurance policy to guarantee us fixed income once we’re retired. The younger we are the cheaper the premium. We can also invest in our children’s future through RESPs (similar to 529 plans.) But the later we wait to invest the more opportunities we will miss along the way.
- Learn from Mistakes – We can afford to make bigger mistakes because we have the time to recover from them ( ・ω・) Some mistakes to avoid are: postpone investing, expect unrealistic returns, and keep all eggs on one basket. It’s never too late to start investing. For those who made the mistake of waiting to invest, remember that the game is not over yet. “The best time to plant a tree is 20 years ago. The second best time is today.“
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Random Useless Fact: The elephant is the only mammal that can’t jump.
Really nice article, i’m happy i started this year (im 23). i see alot of comments (regrets) on dividend forum and blogs about how they should have started sooner !
Good thing for us we won’t have those regrets by the time we’re older.
Very good advice. This should be given to every high school student. You need to save save save because who knows what will be around when you are ready to retire.
Yeah, hopefully we’ll see high schools take financial literacy more seriously.
It is nice in theory….if we ever see it…that will surprise me. Maybe by the time my 2 girls are school age. They are 3 and 1 now….. lol 🙂
I’m not very confident in the public education system either. At least we can teach our kids what the schools don’t.
My wife bugs me that our future child’s first word will be “dividend”.
Haha, that would be so cute.