Here’s the Reason Why You Should Start Investing Your 20s
The reason is pretty straightforward. It’s due to the wonders of compound interest. Often quoted as the Eighth Wonder of the World, never underestimate the effects of compound interest. Not sure what are we talking about? Do refer to the chart below.
Not sure what are we talking about? Do refer to the chart below:
Assuming all of them invested the same amount of $500 for 10 years at different stages of their lives and they achieved the same compounded return of 10% annually. Blake started investing in his 20s, 10 years earlier than Denise and 20 years earlier than Jacqueline. As a result, Blake achieved an absolute return of 159% more than Denise and 573% than Jacqueline! Although Denise started in her 30s, she also achieved a return of 159% more than Jacqueline!
With this in mind, we are sure of 3 things that you can do to maximize the effects of compound interest to your best advantage.
- Time – The younger you are, the more time you have to compound your money
- Money – The more money you can save, the more you can achieve a greater effect of compounding.
- The rate of return – In this scenario, we are assuming all of them just to compound their money at a rate of 10% annually, what if you’re able to achieve a rate of return of 15% to 20% year to year?
Not in your 20s anymore? Fret not! The next best time you should start INVESTING is NOW!
To find more how average individuals like you and me are growing their money at a rate of 15% to 25% year to year, join us for a complimentary seminar on value investing! To find out more, simply click on the button, fill up the form and we will send you the details!
“Please note that the material here is provided to you for general information and illustrative purposes only, or as descriptive case studies on how our value-investing principles may be applied. It is not intended to be and should not be construed as any form of general or specific financial advice. For the avoidance of doubt, we do not recommend or provide opinions on how or what you should or should not be investing in, and you should always do your own research and independent assessment before making any investment decisions, taking into account your own specific circumstances. If you require any financial advice on investments or any other financial matters, please consult the relevant professional financial advisers.”