Why Investing Early is so Important

Investing is a crucial component of building long-term wealth and financial security. While it may seem daunting or something to put off until later in life, the truth is that starting early can have a significant impact on your financial future. 

⏰ Time IN the market > TimING the market. 

So here is why it’s so important to invest EARLY, even if it’s just $50/month! 💸🤑

The Power of Compound Interest:

One of the greatest advantages of investing early is harnessing the power of compound interest. Compound interest allows your investment returns to generate more returns over time 📈🚀 By starting early, you give your investments more time to grow, and even small contributions can turn into substantial sums in the long run. The earlier you begin investing, the more you can take advantage of compounding and maximize your potential returns.

For example:

🧍 Person A invests $6,500 in a Roth IRA at 21-years-old and NEVER contributes another dollar.

🧍‍♂️Person B starts to invest $500/year in a Roth IRA at 45-years-old & does that every year for 20 years straight.

🧍Person A set aside $6,500 total.

🧍‍♂️Person B set aside $10,000 total.

But when they reach 65 years old:

🧍Person A would have $177,883

🧍‍♂️Person B would have $25,211

(assuming 8% return)

🧍Person A made ~$170,500 without doing anything

🧍‍♂️Person B made ~$15,200 without doing anything

👏 The ONLY DIFFERENCE was the time.

Long-Term Financial Goals:

Investing early provides a solid foundation for achieving your long-term financial goals. Whether you have aspirations of buying a home, funding your children's education, or enjoying a comfortable retirement, starting early gives you the advantage of time ⏱️🏡 Investing over a longer period allows you to weather market fluctuations, take advantage of market growth, and gradually build wealth to support your future needs 💫

Building Wealth through Dollar Cost Averaging:

Another benefit of investing early is the opportunity to use dollar-cost averaging. This strategy involves investing a fixed amount of money at regular intervals, regardless of market conditions 💰🎢 When you start investing early, you have more time to benefit from the ups and downs of the market. By consistently investing over time, you can average out your purchase prices and potentially reduce the impact of short-term market volatility on your portfolio.

Developing Financial Discipline and Learning:

Investing early instills financial discipline and encourages a lifelong habit of saving and investing 🏦🫱🏻‍🫲🏼 It requires careful planning, budgeting, and understanding your risk tolerance. By starting early, you have the opportunity to learn from your investment experiences and make adjustments along the way. Over time, you'll become more comfortable with investing concepts, gain financial knowledge, and make informed decisions about your money.

Mitigating the Impact of Inflation:

Inflation erodes the purchasing power of money over time 🌊 By investing early, you can potentially outpace inflation and protect your wealth. The returns on your investments have the potential to grow at a faster rate than inflation, ensuring that your money maintains its value and grows over the long term 🌱 This helps safeguard your purchasing power and enables you to maintain a comfortable lifestyle in the face of rising costs.

BUT DO NOT let this discourage you if you’re older than 21— I didn’t start investing in my Roth until 23 and MOST Americans do not have Roth IRAs (which makes me 😭). The point is, the sooner you start the better. So what are you waiting for?!

If you found these insights helpful, I invite you to join my Career Workshop Intensive, a 4-part program designed to help you get a job you love ASAP. 🌈