Like most things in life, success in investing can become easier with an early start. Put simply, the earlier an individual decides to begin planning for their retirement the higher the potential is to achieve maximum returns.
This concept holds true for all aspiring investors and if needing more understanding of why investing is best began early, a quick look at the explanation provided by financial advisor Chris Linkas will prove beneficial. Linkas provides five reasons that individuals should begin investing as soon as their situation permits.
Time Allows For Risk Taking
Typically speaking, investment ventures that are riskier afford the greatest return on investment. When an individual has sufficient time to recover from any potential losses can be more aggressive in regards to making risky moves.
Individuals that began their investment journey later in life are more likely to exercise more caution and with good reason.
The Benefits Of Compound Interest
Chris Linkas explains that compound interest is simply interest that is paid on previously earned interest. Investors that continuously reinvest their earnings will increase their earning potential exponentially.
Improved Spending Habits
Deciding to invest early in life is conducive to developing disciplined spending habits because it becomes a necessity to focus on cutting expenses and budgeting to fund investments.
These lessons will benefit individuals through their lives especially later when they have capital from earlier investments with which to work.
The old saying about the early bird gets the work is a philosophy worth living. The earlier a person begins to invest the better their financial health will be later in life according to Chris Linkas. This will often time lead to better positions than enjoyed by peers as most people will not take advantage of the many benefits that early investing provides.
Improved Quality Of Life
The 25 years of experience Chris Linkas has taught him that the earlier an individual begins to focus on their 401K plan, Thrift Savings Plan, Roth IRA, or whatever investment vehicle they choose, the better their quality of life will be in their retirement years.