Financial saving is an uncontested necessity. How much – and how early – one begins saving, however, is less concrete. One thing is still certain though: the sooner you start saving, the better. Which means it’s time to stop procrastinating. Whatever your deterrent (perhaps the market seems unreliable, or you feel you need more expertise to invest wisely), it’s costing you. Experts estimate up to 40% of individuals experience a financial loss due to delayed investment.
Three important reasons you need to start investing now:
1. Compound interest
When you start investing you could impact your savings far more than the amount you invest. Here’s a short example: Imagine you invest R1000 each month from the age of 25, with an average annual return of 8%. By 35, you will have accumulated R185,000. If you didn’t save another cent thereafter, you would still have just over R2,000,000 at 65. Conversely, imagine you only began saving at 45, this time at R2500 per month. Although you’re putting away more than double the first amount, at 65 you would only have saved roughly R1,480,000. Simply put, the sooner you begin investing, the more you’re likely to benefit long-term.
If you think you don’t have enough to save meaningfully each month, think again. It may seem futile to invest smaller sums, but you’re gaining more than monetary value – you’re also getting valuable wealth management practice. Building a habit of investing helps you automate your saving; you will get used to spending a smaller percentage of your monthly income, become more conscientious about investing as you monitor your savings (we can help you with that), and slowly begin to increase your savings rate over time.
3. Investing has never been easier
Individuals today are surrounded by credible financial experts such as independent financial advisers, and online automation makes it easy to save efficiently. Typically, larger companies not only create retirement plans for their staff, but contribute to that investment each month too. Then, index funds offer a paint-by-numbers approach to the stock market, mirroring or tracking a stock market index. This allows you to make intelligent investments without having to be an expert in the field. That is what The Robert Group does best. Thanks to our independent status, industry expertise and tailor-made investments, you don’t have to waste time learning to invest wisely – you can focus on getting started while leaving your investment management up to us.
Whatever your saving potential, it’s clear the best time to start saving is now. Begin putting your money to work, so you can guarantee bigger returns for when you need it later.
Need help working out an investment strategy to suit your needs? Contact us – as independent financial advisers, we can help you handle every aspect of your wealth journey, from insurance to investment to ensure you get make the most of your money.
Want to know more about the importance of proper investment management? Download our Investment Guide and get started.