• I CAP FINSERV

Why you should start investing at a young age

Updated: Sep 1

There is never a right age to start investing, whether your 18 or 60 years old. But if you’re earning money, you should make it a habit to start investing, no matter what the amount. Spending money you earn when you’re young might be tempting since many 18-year-olds don’t have any big financial goals aside from higher education However, it’s best to start investing as early as possible as you could potentially grow your investments over time and have a competitive edge over other investors who joined the investing race at later stages of their life and it would also help you gain a better understanding the way the financial markets work. But one of the main reasons why its best for people between the age group of 18- 23 years old should start investing is because they can take advantage of compounding.
At such a young stage in life, financial planning for the future and retirement may seem a lifetime away and might not sound as appealing but understanding the power of compounding can make you wealthy at later stages in your life. Let’s assume that you decide to start investing at 19 years old. Every month, you put 24000 into an S&P 500 index fund with an average return of 8%. After 40 years, you will have an investment balance of 83800000. But if you decide to start investing when you turn 29 years old and every month, you deposit 48000 into an S&P 500 index fund with an average return of 8%. After 30 years, you will have an investment balance of 72000000. Your total investment when you were 19 was only 11520000 over 40 years, and your investment at 29 was 17280000 over 30 years. Even while your 29-year-old self was investing more money, you lost out on over 5760000 by waiting to invest.
As a newbie investor, it can be difficult to know which investments to invest in. There are several ways to invest your money, in order to get higher returns than what you would get from a mutual fund you can invest in Stocks, bonds, Employer-sponsored investment accounts (ESAs), and Robo-advisors. There are some key characteristics of the best investments you should look out for. You should start with those that have a long track record of stability and have a high probability of providing the return you seek.
Here is a list of the best shares for beginners to invest in India in 2022 for the long run. • Maruti Suzuki • Blue dart • SBI • Tata Motors • ITC • Tata power

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