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Wednesday, 13 July 2016 00:00

Why to start investing as a youngster

Young people are not investing… and it’s a problem. According to a survey conducted by Bankrate, only 26% of young people under 30-years-old are investing in stocks. That’s compared to 58% of Baby Boomers. With stocks tripling since 2009, why wouldn’t you want to invest?

Here are some tips that will hopefully inspire our next generation to start creating wealth

 Tip #1: Start Investing – The Time To Invest Is Now

Youngsters, here is the best advice you can get: “Buy low and sell high.”  Okay, I’m being facetious, but we are in the middle of the biggest sell off in years, and it is a perfect time to put a toe-in-the-water and start investing. The sky is not falling. This is a correction, mostly due to China’s economic slowdown and fears over climbing interest rates.

Tip #2: The Miracle Money Can’t Buy – Time

You are young and you have time on your side. Even genius, Albert Einstein, is quoted to have said, “Compound interest is the eighth wonder of the world.  He who understands it, earns it…he who doesn’t…pays it.”

During the 20th century the US stock market returned an average of 10.4% a year.  Just $1,000 invested in 1900 would be worth over $19.8 million by the end of 1999.  At a 15% average return per year, it only takes 30 years to turn R15 000 to R1 million. I’m not saying that we will average 10% returns, but we may. 

Tip #3: Stop The Excuses and Start Investing Now 

The Great Recession may have turned your world upside-down, but all of us, no matter our age, have experienced the best and worst of economic times. And, with the news getting better and better each day, and historical stock market trends showing great returns over the long haul, why not take advantage of today’s opportunity in the market. I may not be around when you retire, but you can thank me when you’re on a beach somewhere enjoying your “Advanced Golden Years.”

Young people, sometimes all we need is a kick in the assets to get going… so let’s go!

 

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