3 reasons to start investing right now
As anyone who’s ever taken a dip in the ocean knows, often the hardest part is getting in. Same goes for investing. It can be daunting to look at that pool of blue and tell yourself you’re going to enter. Sometimes you just have to dive in headfirst and have confidence you’ll be fine.
Thankfully, when it comes to investing, there are numerous tangible benefits to getting in, and doing so early. If you need a bit of prodding, consider these points.
1. It’ll help you create a more secure retirement
Investing can play a crucial role in your overall retirement strategy. Just consider the costs involved in creating a secure nest egg. According to the Association of Superannuation Funds of Australia’s retirement standard, couples hoping for a “comfortable” lifestyle will need at least $58,326 a year, while single people will need $42,597. That doesn’t even take into consideration any large, unexpected costs.
Despite the importance of this sum, Australians are falling short. According to a Melbourne Institute paper published in 2014, titled Measuring Adequacy of Retirement Savings, both couples and singles across the board were experiencing substantial shortfalls in retirement savings. By investing now, you can avoid this fate – a property, share or managed fund investment today could be worth as much as triple in a couple of decades time.
2. Starting early is better
Investing can be particularly beneficial if you have time on your side. The more years you use to build your portfolio and grow your wealth, the larger pot of savings you’ll likely end up with, while also giving you the luxury of avoiding high-risk ventures for short-term gain. You can take it easy and move at your own pace.
Consider veteran investor – and one of the world’s richest individuals – Warren Buffet. In a January 6 interview with Benzinga, he told the audience that the “most important thing to do is to do it” when it comes to investing.
“Just put aside a little money every month…you’re bound to have a substantial capital in the end.”
3. It can help you make up a shortfall in your regular finances
Keeping up with your pay cheque can be difficult. The ING Financial Wellbeing Index for April 2014 discovered that 63 per cent of all households have felt stretched between pay days at some point, while a shocking 15 per cent say this is a constant state for them.
By chatting to a financial adviser and picking the right investments, you may be able to top up your pay cheque. You don’t necessarily need a lot of capital to start investing. Some managed funds, for instance, only need as little as $1,000 to get you started.