I like to plan and I think it’s one of the things that makes me an effective leader in my communities. One thing I’ve noticed though is that many of our youth aren’t financially educated so they don’t see the value in planning for the future and investing early in life.
If a person is going to have enough money to retire in a comfortable fashion, he will need to start investing as early as possible in life. When a person begins investing at an early age, there is a much better chance that the person will be able to accumulate enough for retirement and for any emergencies that may arise in the future.
From a young age, people need to understand why it is a good idea to have a well-rounded investment portfolio. One of the main reasons that people should invest is that just keeping money in a traditional savings account will not provide sufficient wealth gain to truly benefit a person down the road.
A regular savings account is not even keeping up with the rate of inflation right now. In order to gain money for future needs such as retirement, a person needs to invest in a variety of investment vehicles that include a mix of stocks and bonds.
If a person begins to invest in stocks and bonds early in life, he will be able to withstand potential losses and still recover and come out with substantial resources upon retirement. If a person waits too long to begin an investment plan with stocks and bonds, a large setback as occurred during the Great Recession might decimate a portfolio without sufficient time before retirement to gain that money back.
Starting out early in life with investing greatly increases the amount of money that a person will earn for retirement. Just waiting ten years to begin a systematic invest program can be the difference of tens of thousands of dollars when that money is needed the most.
If investing is begun early in life, it can help with financial needs in addition to retirement. There may come a time in one’s life when a substantial amount of money is needed. If investing was begun early, there is a good chance that a person will have enough in her investment account to provide for needs and some wants that aren’t too extravagant.
Finally, if investing is started early enough, it is possible that there will be enough money in one’s investment portfolio to generate a steady stream of income. This may be possible through dividend payments from individual stocks and through the interest payments on bonds.