Hey Millennials: Here are 6 Ways You Benefit When You Start Investing Young

Perk up, millennials: we have some good news! As you set out into your twenties or thirties, the world might seem like a big, fast-paced place – and it is. You will encounter things that are completely new to you and you might find yourself thinking things like “why has school totally prepared me to use the Pythagorean Theorem (*and insert other virtually irrelevant skills here*), but not taught me about more practical things like investing my money?” Get ready, here’s where the good news comes in: while you might never need the Pythagorean Theorem again, investing your money might be both easier and more beneficial to you than you think – especially if you start now. Who doesn’t like to watch their money grow? Enough said. But, if you’re not convinced, here are some other pretty good reasons why starting to invest at a young age – even if you don’t quite know what you’re doing just yet – can be so good for your future:

1. Compounding

The longer you have your money invested, the more your returns can build off of your previous returns. Who doesn’t want to make money off of the money they’ve already made? (Once again, enough said.)

2. Experience

You’re young. At this point in your investing career, your rate of saving will be and should be much higher than your rate of return from your actual investments. This is true because it’s hard to make huge profit without putting in a good amount of money first. However, during your younger years, you can build up the amount of money you invest while gaining valuable investing experience. The more money you put in now, the more experience you get, and the more your rate of return should grow.

3. Less Financial Responsibility

Every little bit counts. You might think that a couple dollars a week won’t have any real effect on your life, but now is the time to start! Why? This reason is simple: when you’re young and just starting out, you have less financial responsibility than people who are older. By this, we mean that you probably have fewer (and less expensive) bills to pay or things to care for right now than you will later in life. So, you might have more ability to add some money to your accounts and make riskier investments now than you might have in the future. Take advantage of the time you have!

4. Save For the Future

Speaking of the future: from your twenties or thirties, retirement may seem like a distant dream. In fact, you might feel ridiculous for even thinking about getting there. Like we said, you still have years and years ahead. But, let us assure you, it’s not ridiculous to think that way. It’s actually very smart. Even if you’re just starting out or feel like you’re barely on your feet now, putting away just a little bit each month can get you into a good habit of adding to your investments for the future. Habits are built over time – start soon!

5. Peace of Mind

Sure, we all say that money can’t buy happiness, but I’m definitely a believer that putting away money can improve your peace of mind. Be honest, having even a little bit of extra money saved right now would probably relax you, too. By starting your investments early, you can build upon the savings you do have and continue to grow your monetary safety net.

6. Long Term Investing

As an investor, you may want to keep some long-term investments. The longer you hold an investment, the more likely it is to produce significant positive returns, as the markets generally see long-term upward trends. Now, remember the principle of compounding and think about holding an investment for 30 years. You never know the kinds of returns you could achieve in the long run!

Get to it, young investors! Trust us, you’ll thank yourselves later.