Here’s how it works: Let’s say you have $2,500 in a savings account that earns 5% in annual interest. You’re not just earning interest on your principal balance your interest earns interest! Compound interest is making money on top of the money you’ve already earned. That’s because of the power of compounding interest. The excitement of investing is that even a small account balance can grow into a large pile of cash over time. But while getting started early is a massive help, it’s also never too late to start investing for beginners! The Power of Compound Interest But for a 30 year old starting with nothing, that number is more than doubled!įor any older folks out there, this may seem disheartening. For a 20 year old to build a $2 million retirement portfolio, they would only need to save and invest about $432 per month. The sooner you begin the longer your money will be working for you.įor example, check out the chart below. When it comes to investing for beginners, the earlier you start the better. Consequently, the timing of when you start investing could make a bigger impact on the amount you end up with than how much money you actually invest over time. By waiting to invest, you could be missing out on potentially lucrative financial gains. In fact, experts estimate that ~40% of folks have experienced a financial loss due to procrastination. But the truth is that putting your investing journey on the back burner could cost you more than you realize. It’s not that your hesitancy doesn’t make sense. Have you ever said to yourself, “I’ll start investing when I make more money.” Perhaps you’ve been concerned about market volatility as a result of recent current events (see COVID-19 global pandemic). Learning to invest might not be the most fun topic in the world, but I promise you it is worth it! Once you nail the basics and demystify some of the complexity, it turns out that building wealth is actually quite easy. We’ll also cover a bunch of common investing questions towards the end. It’ll include setting a budget, how and where to open accounts, and what assets to invest in. In this post we’ll be covering a basic five-step plan to start investing for beginners. The goal of investing is to simply buy assets that will hopefully increase in value over time. They started with nothing, and learned to save and invest money from the ground up. In fact, about 80% of American millionaires are self-made. I’m excited to tell you – none of that is true! Are you intimidated by investing and don’t know where to start? Most people think you need deep pockets, ample free time, and a Wall Street education to start investing.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |