3 Reasons Why you Should Start Investing Now

Investing is one of those things that a lot of people know they should be doing, but keep putting off. This is why I want to provide you with 3 reasons to start investing now!

Most people will say they don’t have enough money to get started. Most think they don’t have the proper knowledge necessary to start investing. They might also be overwhelmed by the choices and are worried about making a mistake and losing everything.

Those are all understandable reasons, but investing is too important to set and forget.

Investing is the most powerful tool you have in your financial arsenal. I’m going to talk about the three biggest reasons you should start investing now. It doesn’t matter how much money you have or how much you know about it. So, with that said let’s talk about those 3 reasons:

Making Investing a Priority Will Improve Your Overall Finances

What I mean by that is that it will make you think like an investor instead of like a customer. You will view money, not as means to buy products/services. You will see money as a tool for future gains. Most people spend money on things they don’t need and then complain that they don’t have any money.

Once you start investing you won’t see money as this one-dimensional tool. If you invest and you start diving deeper into the world of wealthy living you’ll see that money is a multidimensional concept. You start living with the end in mind, you’ll be happier in the end.

It all comes down to compounding interest. What is that you may ask? Let’s discuss a quick example below:

Compounding Interest

Compounding interest is the money maker here. This is one of the first things you’ll hear when getting into investing. In my opinion, if this is good enough for Warren Buffett to stay in the market long term it’s good enough for me. But, let’s break down how compounding interest actually works.

Here is an example:

Let’s say you invest $1000 and earn an 8% return (the S&P 500 average return year over year since 1954). After one year you will have $1080 in your account. Pretty cool, right!

Now let’s say that you earn another 8% return the next year. This is where math really starts working in your favor because you get that return on NOT ONLY the $1000 you invested but ALSO on the $80 you earned the year before.

So instead of earning $80 like last year, this year you earn $86. That puts your total account value at $1166.40. Now don’t forget, that does not include the money you will be adding every year or month to the investment account. But if you just take that $1000 and let it ride for 50 years you’ll come out the other end with $46,901. That’s pretty good for just putting in $1000 one time! Now just imagine putting in $1000/month. That’s crazy.

Now for me, that’s enough.

Habit

You’ll build the habit of investing and start developing more knowledge. Here’s how:

Building the habit of saving, and automating your savings is a skill that will be learned by doing this. This will in turn allow you to get used to the idea of some of your money being set aside each month.

Which in turn will build the habit of increasing the rate that you save. That will allow you to find ways to increase income and/or cut costs to free up more room for savings.

The habit of making investing decisions and building your knowledge becomes almost second nature. You’ll have a better grasp on deciding which accounts to use and which funds to pick. As well as how to navigate all the strange logistics and terminology.

Finally, you’ll build the habit of sticking to your investment plan. While everyone around you is bailing on their plan and trying to figure out what works. Just take a look at what Warren Buffet has been doing for the past 20 years. Consistency and good planning are key.

Takeaway

So, there you have it those are your 3 reasons why you should start investing now. If you haven’t started investing now, don’t worry you haven’t missed out on anything. But I would heavily advise starting now if you haven’t already. For the reasons stated above, you must start now. Whether you have the knowledge or not, or have thousands of dollars or not. Starting now will provide you with the foundation for more freedom when your retirement decision comes around.

The key to investing is consistency, no matter what the economy is doing, pick a path, and stick to it. Assuming that path is a smart one. Start with simple investments like index funds and move to more complex investments later. You’ll be happy that you started now rather than later. The longer you are in the game the more you get paid. These are 3 Reasons Why you Should Start Investing Now. Happy Hunting!

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