Why should you start investing ASAP?

When you’re young, the thought of retirement or your future isn’t attractive at all. This means giving up a portion of the little money you have to leave idle for a long time. However, it can make the difference between big capital or small capital in the long run. The big question is Why invest?

Why should you invest ASAP?

There are various reasons why you should invest as quickly as possible. Next, we explain some of the most important ones.

Because you are harnessing the power of compound interest

Compound interest is a financial mathematical equation in which the profitability obtained by investment is added to the capital of the previous period to generate more profitability, so that the capital grows exponentially rather than linearly.

Mathematically, the function is as follows:

Final Capital = Initial Capital x (1 + i) ^ n

where I is the value of the interest as a percentage, and n Number of years of investment.

In fact, compound interest allows you to double the outcome of an investment, especially the longer the investment lasts.

becauseThe power of compound interest is the main reason to start investing as quickly as possible.

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Because you have more time to recover from losses

If you are young, you can invest in higher-risk products which, after all, are the ones that provide the highest returns.

The reason is that you also have more time to rebuild in the event of eventual losses which, as the market has already shown on countless occasions, are likely to occur.

Because you avoid the opportunity cost of stopping your money

The most common situation in the financial markets is the uptrend.

Thus, history has shown it, as the astonishing economic growth after the Industrial Revolution dragged the stock market into the present state, with the stock market reaching an all-time high.

For this reason, taking your money out of investing assumes a certain opportunity cost, especially if your money is parked in term deposits or checking accounts that are not currently bringing any kind of profitability.

The sooner you invest, the lower the opportunity cost you will have to incur.

Because it is more financially efficient

If you are betting on certain products, such as mutual funds or pension plans, the investment is more efficient from a tax standpoint.

Indeed, in the specific case of pension plans, since contributions are deductible in personal income tax, you will be able to save more money, which is especially important when you are young, since you can even reinvest this savings to get more shares.

The big difference: because investing as soon as possible means more capital in the long run

The numbers aren’t deceiving: investing as quickly as possible can earn you a huge fortune in the long run.

The differences are really big, especially the longer the investment.

To give an example, let’s imagine we have an initial investment of €10,000 at an interest rate of 5% per annum, in line with market profitability.

Keeping the investment for 20 years, we will have obtained a total capital of 26,532.98 euros.

But, if the capital is maintained for another 5 years, the assets will be with a total value of €33,863.55. And if we hold out for 50 years, then the capital will be 114,674.00 euros.

general Capital
One 10500.00 EUR
5 12,762.82 €
10 16,288.95 €
fifteen 20,789.28 €
twenty 26532.98 EUR
25 33863.55 €
30 43,219.42 €
35 55160.15 €
40 70,399.89 €
four five 89,850.08 €
46 94,342.58 €
fifty 114,674.00 €

That is, if you invested 10,000 euros when you were 20 years old and withdraw it at 70, you will get a total capital of 114,674.00 euros.

To put this data into perspective, if you had invested after 10 years, the capital you would have made would be €70,399.89 under the same conditions.

The hardest thing is to take the first step

In fact, the most difficult thing is to take the first step, especially when you are young and do not have the appropriate experience or knowledge. But there is nothing to worry about.

Thanks to inbestMe, you can start investing from an early age in a variety of products, such as index funds, pension plans or through Robo Advisors. In a simple and 100% online way.

Why invest? Because now you have no excuse to look at the future from another perspective. With inbestMe, the investment is in your hands.

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