When to Start Investing? Start Young & Invest Regularly

Wondering when to start and make your first investment? Yes…time is a crucial factor. Read on to know why it is important to start investing early. Here are the  details on when to start investing?

What would you think if you were fifty years of age, had a doting daughter and a SNOB son; had happily met their whims and fancies always as both of them were addicted to the latest gizmos and trends out there in the street and therefore you really never saved your money ever, leave alone invest it and are now suddenly faced with the daunting task of coughing up fifty lakhs for your daughters higher education in the US.

Fact of the matter is, there are a lot of investors out there who find themselves in the same position – those who never saved for such a goal in one’s life. It’s hard to answer when to start investing?

But even if one had, how soon should one start? 5 years before the money was needed? 10 or 15?

When to Start Investing?

Finance pundits will tell you, the earlier, the better.

Start investing at a young age !

Let us take an example.

Suppose Mr Wise-Saver is 30 years old and decides to save till he works (say 60 years of age). However, he can only invest Rs 10,000 each year.

On the contrary, Mr Movie-Goer can save more but hasn’t really started till he reaches age 45. With 15 more years to go before retirement, he realizes he has to rack up money. He decides to put in Rs 20,000 each year, double of what Mr Wise-Saver puts in.

Lastly we have Mr Gone-Case, who doesn’t really care about saving – he wakes up at age 55 and thinks that investing Rs 40,000 each year will do him good. Let’s compare what each person will get at age 60.

Answer to when to start investing is Power of Compounding

It’s imperative that each of us start investing our money as early as we can, possibly in the early twenties. Waiting for a day, when we think we will earn enough to save and invest will never come – with an increased earning capacity comes an increased living expense. This is a vicious cycle every investor needs to get out of.

So start now with whatever little you have ! At least you have the idea on when to start investing.