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Should you start investing?
00:54 Mins Read
Let’s start with the most fundamental million-dollar question. Should you start investing?
While investing is undoubtedly an essential financial practice, you need to be ready to invest smartly. So, when should you start investing? And how do you know if you are ready to begin investing? Ideally, you should start investing when you begin earning on your own, so you get a headstart early in life. But before you invest your money, you also need to be financially aware of what you’re investing in.
The prerequisites for investing include a solid financial plan, financial capability to invest, and a reasonable understanding of how investments work. This way, you can understand why you are investing in the assets you choose, and create a financial plan that will help you achieve your goals.
Reasons to start investing
Looking for the right reasons to start investing? Here’s why you need to begin your investment journey sooner rather than later.
Time is on your side
When you start investing early in life, your investments have a longer time to grow. This gives you the luxury of investing smaller amounts, instead of a lump sum capital. If you only invest much later in life, you may have to shell out a larger capital to catch up with lost time.
You make investing a habit
If you begin investing at a young age, investing becomes a habit. You can take advantage of Systematic Investment Plans (SIPs) and other schemes that require regular and consistent investments.
The power of compounding helps
The magic of compounding plays a major role in wealth creation. And compounding works best when you invest for the long term. So, if you’re looking for another reason to start investing, compounding is the answer. It helps you earn interest on interest, and gains on your gains.
You can take more risks
Investing when you’re younger also makes it possible for you to take more risks. And generally, high-risk investments also come with the potential for higher rewards. Your portfolio can enjoy greater exposure in high-risk-high-reward investments the earlier you invest.
Should you start investing? Investing is an important step to be financially secure. When you are young, life seems full of potential You have dreams - car, home, vacations and what not. Investing helps you fulfil those dreams. As investing helps your money grow. When done right, a small amount invested today can give you a big treasure in your future. But how to do investing right? This takes learning and understanding of financial markets Which can be a LOT to process. But don't worry, we are here to help you. Read about investing and money management on Smart Money by Angel Broking And fulfil your dreams.