Financialtreat – will explain about Investing From a Young Age to Achieve Financial Independence that you will get in the following article. Let’s look at this article carefully!
When young people are asked about investing, what will they answer? Youth, colorful fun times with a variety of stories. Lots of experiences and fun things to do when you’re young.
But behind that freedom, young people are also synonymous with the habit of squandering money on unimportant things. In fact, the financial things we do now will greatly impact our financial situation in the future. Therefore, on this occasion, we will discuss youth investment and managing finances.
Achieve Financial Independence: Reasons Why Young People Should Start Investing
More Understanding To Manage Finances
For those of you who are still in your 20s, you may think that putting aside money to invest is difficult. But, you need to realize that it will be much more difficult when you do it in the next 10 years.
The reason, is that in the next 10 years, the funds you have to set aside will certainly be more because of your needs and obligations that are more and more, making it more difficult for you to set aside money than now. Not only that, over time the value of the currency will increase.
Therefore, you are still young to invest some of your income funds, because later you will get greater profits in the future. Especially if you are observant in utilizing the compounding effect. Remember this principle, it is better to save and invest from now on, rather than having to try hard and not be able to enjoy your old age later.
Young People Can Still Take More Risks
No type of investment is free from risk. Therefore, when you are young, you tend to still be better prepared to accept risks and have the opportunity to try more deeply to take greater risks.
In investing there is a principle, high risk-high return. For example, if you are investing in stocks, you should know that the stock market has extreme fluctuations in the short term. Therefore, by making it a long-term investment, it will be able to offset fluctuations and you can also achieve a significant increase in profits.
Well, imagine if you are just starting to invest in retirement, you are not recommended to try something that is too risky or long-term. Of course, because it’s hard to wait 20 years when it’s in those days, right? Therefore, try investing now when you are young.
It’s Easier to Save When You’re Still Free from Commitment
Many young people are just happy to complain about the difficulty of setting aside money to save. But, still choose to shop and have fun, don’t even think about whether the next 20 years of finances will be easier / vice versa. In fact, as young people must understand that, the older we get, the more responsibility accumulates.
Your funds will be used to pay various installments and other responsibilities. For example, paying home installments, car installments, for renovations, paying for children’s schools and so on. Therefore, before all that becomes an obligation, you must get used to controlling your finances.
As a young person, you have to start thinking about investing, so that in old age you can enjoy all the effort. You don’t have to worry, investments can be made by anyone and not necessarily for people with a lot of money. You don’t need to spend millions of dollars to start your first investment.
In fact, now there are also many investment products such as stocks or mutual funds that can be purchased starting from hundreds of thousands. In addition, you can also fund also on peer-to-peer lending platforms, to learn to invest fundamentally, because the principle is the same.
Meanwhile, you must choose a peer-to-peer lending platform that has been ojk-supervised and supervised such as KoinP2P from KoinWorks. Through p2p lending indonesia at KoinP2P, you can fund starting from Ro100,000 with an effective yield of up to 18% per year.
Creating New Financial Resources
By investing you can create new sources of finance, because of the increased value for your money. Unlike when you save, the value of your money will be silent and not increase, not to mention if there is inflation. Well, by investing the value of your money will also increase.
Realizing Financial Goals
Of course, we have our own financial goals, such as buying a house in the future, funding the acquisition of children, to starting a business. Investments can help you to realize these financial goals. The profit from the investment you get can be used to realize your financial goals earlier and Achieve Financial Independence.
Let the Money Work for You
When we are young, our focus is more often divided to do many things, activities in various fields. While focusing on other things such as continuing your education to a higher level or while building a career, you can start investing so that later money works for you.
When you save or just hold your money, the money you save will not work for you and will not increase in value. Different when you invest, the funds you invest will make additional money from the capital gains it generates.
Preparing a Retirement Fund
Most young people may not think so much about retirement funds, because they think it is still very long. In fact, pension funds must certainly be prepared immediately, because we will not work forever, right? There will come a time when you have to retire, quit the workforce. Well, if it stops working, where else does the source of income for survival come from?
Not to mention if we have dependents who still do not make significant finances. If you invest from now on, investment funds and benefits you can enjoy when you retire later. The value of your money will continue to grow over time.
Its Long-Term Nature
People invest in order to earn more money at a higher value in the future than the value they currently have. The ‘future’ could be at any time, whether it’s in the next few weeks, in the next few months, even years ahead.
Investment is not a type of source of income that you can rely on for a short time, but, you have to let the value of the money increase over time so that you can then use it.
For young people, who certainly have a variety of activities so that they keep them busy with various activities, you can focus on other things while gaining new sources of income. On the other hand, you enjoy the process of increasing the value of the money invest while focusing on doing something else.
Let your investment fund grow in the long run while you focus on building other sources of income or focusing on doing other things, especially in your youth. That way, you can enjoy your investment funds at the right time.
Achieve Financial Independence: Investing Mistakes That Young People Often Make
Delaying the Investment Plan
Delaying means eliminating opportunities. This is not a good thing especially when it comes to the investment world where the market situation can change very quickly without realizing it. Delaying investing means delaying success in the future. Indeed, in order not to delay, it takes a lot of study and research to be able to determine when is the right time to invest. Experience can also give you the confidence to act.
More On Speculating Than Investing
Speculating is indeed an unavoidable thing from the investment world. However, too long speculating rather than investing is a bad habit. This is because a lot of time will be waste. Opportunities and successes may be miss. But this is still done a lot, especially novice investors who have many doubts.
It was doubt that made him speculate for too long. In fact, if only he was an investment, it could be that the results he received were not what he thought. Speculating may and delay for investment can also be if the situation is clearly visible will make a loss.
A Lot of Wasted Money
The next mistake is when the investor has a lot of investment capital but cannot manage it wisely. Like a knife with two eyes, if the money is invest with a rational amount, then if you experience a loss it will not make you dizzy. Because indeed, loss is one of the biggest risks that cannot be avoid from investing.
But if you are too sure, then spend money on only one investment, it is very risky and even fatal. Therefore, diversify by dividing your funds into two or three different investments. If one fails, then the profit from the other will return its capital.
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Not Asking Much
For young investors, it should not be too sure so as not to ask those who are already more experience. Of course, because you don’t have much knowledge about investing.
It doesn’t matter if you look stupid or haven’t understood during that time you can ask and learn a lot. After all, the opportunities and successes you will enjoy in the future will return to you. This is what needs to be considere for every novice investor. Lots of questions, a lot of consideration and quick decisions.
Well, that was the explanation of investment and the importance for young people to achieve financial independence. Good luck!