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Invest Early – The Younger, The Better


Many young individuals find it more convenient to delay making any investment decisions until their financial situation is, hypothetically speaking, more stable. However, even with student loan debt and low earnings, the 20s are in an excellent position to invest during or after your education.

Invest Early - The Younger, The Better

Mins to Read: 10 minutes

Investing early in life develops a pattern of financial independence and discipline. Early investment explains the actual distinction between saving and investing. You are never too young to invest, so never let your youth act as a hindrance. Your future financial situation will improve with just a tiny amount of money invested today. To choose the best investment opportunities, you can get advice from a professional to choose the best investment opportunities.

I made my first investment at age eleven -warren buffet

“I made my first investment at age eleven. I was wasting my life up until then,” Warren Buffett once said. Since purchasing his first stock in 1941, he has learned to purchase, hold, and not pay too close attention to the markets. Markets rise and fall daily, but not all of these movements are necessarily significant. Being patient and accepting a certain amount of uncertainty are beneficial qualities for investors.


Buy and hold long-term rather than trying to time the market with your assets. One can profit from their holdings by making investments and having them in reputable businesses for a long time. In ten, twenty, or thirty years, if you invest in good companies and gradually acquire them, they will prosper.


Remember, you are never too young to invest; thus, age shouldn’t be a barrier to doing so. Early investing also enables you to take on risk and, in the event of a loss, offers you more time to recover your investment. Early investments, therefore, have more time to increase in value as the likelihood of generating good returns at a young age increases due to high risk-taking capacity. Those who invest later in life have less time to compensate for their losses, so they are more cautious and steer clear of risky ventures.


The benefits of starting early with investments are discussed below.

Clear Objective

Spend some time getting educated on the fundamentals of investing and financial instruments. Selecting the correct combination of investments is only one aspect of aggressive investing. Find out what you are investing in order to achieve your objective and whether you are saving enough money to do so.

Consider your goals in terms of time: short-term is defined as a few years or less, medium term is defined as five to ten years, and long-term is defined as ten years or more. 

You can make a list of your goals such as

  • Starting a business – 
  • Buying a home – 
  • Retirement – 
  • Getting married – 
  • Having children – 
  • Raising your family – 

You’ll need to make trade-offs along the road. Imagine what you want your future life to look like and what you’re ready to do to achieve there. Keep your objectives straightforward so that you can develop consistent behaviors and virtuous habits and, eventually, manage how much money you save.


More Time

Despite having few resources, young individuals have one advantage: time. There is a purpose for compounding: the capacity to increase investment by reinvested earnings. Investors can amass wealth over time by utilizing the miracle of compounding, which only requires time and the reinvestment of earnings.


Investing when you’re young and impressionable gives you more market time. Time is your biggest ally whether you invest in the stock market, mutual funds, or investment-heavy insurance products. It’s not about timing the market, as they say; it’s about investing more time. The more time one invests, the more power one gains through compound interest.


Let’s use the “snowball effect” example to comprehend compound interest’s power better. As a little snowball rolls down a slope, it piles on more snow to grow into a much larger snowball. The snowball becomes bigger the longer it rolls.


Consider the difference in your retirement fund’s size at age 60 if you start saving for it at age 25 instead of 40. You may even reach your retirement objectives faster if you do this, so there’s no need to wait until you’re 60. You might start your retirement earlier.


By the time an investor was 60, a single Php 10,000 investment at age 20 would have increased to over Php 70,399.89 (based on a 5% nominal interest rate). By age 60, the same Php 10,000 investment made at age 30 would have returned roughly Php 43,219.42, whereas the same investment made at age 40 would have returned only Php 26,532.98. The longer money is used, the more wealth it may produce.


To illustrate the example above:

For single investment,

Age 20: Php 10,000

Age 30: Php 10,000

Age 40: Php 10,000

Future Value at age 60,

investment at age 20 would have increased (table)



Age 20: Php 10,000 with a 5% nominal interest rate

The future value of the single investment of Php 10,000 at the age of 20 is Php 70,399.89.


Age 30: Php 10,000 with a 5% nominal interest rate

nominal interest rate 2 (Pie chart)

The future value of the single investment of Php 10,000 at the age of 30 is Php 43,219.42.


Age 40: Php 10,000 with a 5% nominal interest rate

The future value of the single investment of Php 10,000 at the age of 40 is Php 26,532.98.


Take on More Risks

Your liabilities are typically lower when you start working, leaving you with more income. As a result, you can set aside some of your money for future requirements. It is advantageous to start early because it gives you the freedom to take risks by investing in high-risk, high-reward financial instruments that accelerate your money’s growth.


It’s wise to abide by the proverb “the early bird gets the worm.” Your future financial status will improve if you start investing sooner rather than later. Over time, you will be able to purchase items that others cannot, unlike your peers, who may have opted to invest later in life. Additionally, your finances might, at some point, become unstable, but by starting your investments early, you’ll be ready to handle these difficulties. You can take on more risks to gain an advantage.


The level of risk an investor may tolerate depends on their age. You will be faced with increasing financial obligations as you get older. This covers expenses for raising children, paying for a home, caring for parents, etc. You lose more and more of your capacity to take risks as you take on more responsibilities. As a result, older people tend to invest more in bonds and other low-risk securities.


You benefit from not worrying about these responsibilities when you are young. You gain the advantage of withstanding the volatility of riskier investments. Typically, increased risk translates into more enormous profits. And when your assets, life ambitions, and financial responsibilities increase with age, you can rebalance your portfolio. Later on, when those returns have multiplied, you will thank yourself. 


Young people may afford to take on more risk in their financial activities since they have years of earning potential. Investors near retirement may favor low-risk or risk-free investments like bonds and certificates of deposit. In contrast, young adults can create more aggressive portfolios that are more volatile but have the potential to generate more fantastic rewards.


Take for example, the case of Investors A and B. 


Investor A is an older man in his early 50s. He will likely be spending more on maintenance and will most likely be near retirement. He will think: “what if I suffered a share market loss and were unable to pay your mortgage or even the bare minimum of utilities?” In his case, the best advice would be to gravitate toward low-risk or risk-free investments, as investible funds tend to be less available. 


Investor B, however, is a young man in his early 20s, likely to have a stable job. He’s more open to riskier options due to his assurance of a paycheck that he can be sure to receive at work. He also could establish wise spending and saving practices while taking riskier options to invest and build wealth.

Recover From Losses

The fear of messing up is a common reason why people shy away from investing, and it is a real fear. Most individuals, however, frequently overlook that investing isn’t a vast, complicated endeavor that requires a lot of time and effort to master. Practice makes perfect, just like everything else. Therefore feel free to try out various investment strategies. Even if you don’t get it perfect the first time, you’ll probably recover more quickly than if you wait until later in life to begin.


While you learn about investing, you will unavoidably make some poor or foolish judgments that will cost you money. Starting young gives you the chance to weather and recover from your losses by altering your investment methods later on (don’t worry, even experienced investors make poor decisions occasionally.) Even better, you will have more time throughout your life to reinvest your profits, which increases your wealth.


Here are some strategies you can use to recover from your losses:

  • Understand your Risk Tolerance
  • Keep Sufficient Liquidity
  • Allocate your Assets
  • Diversify
  • Do your Due Diligence
  • Monitor Regularly


It is difficult to construct an investment portfolio that guarantees zero risk because every investment has some level of risk. By implementing and understanding the strategies above, you will be able to balance risk and return in order to recover from your losses.

Learning While Doing

Young investors can learn more about investing from their successes and failures because they have the time and freedom for it.  Young people have an edge because they have more time to learn about the markets and develop their investing strategies. This is due to the learning curve for investing being rather steep. Because they have the time to recuperate, younger investors can avoid making costly financial mistakes. They also can handle greater amounts of risk.


By concentrating on your budget and making necessary cuts to expenses, investing early enables you to learn and cultivate disciplined spending habits. Here, making money by saving is the aim. With bad spending habits and a life full of impulsive purchases, The skills learned from an early investment will pay off in the long run, particularly when you have more money to deal with and restraint is required.


You will be more open to such profound changes when you are younger. You will learn that:


  1. The secret of being a successful investor is to be patient. It is preferable to sit back and do nothing while the stock market is experiencing extreme volatility than to take action. You’ll develop the ability to think without fear. You will become more sensible due to these experiences instead of being led by animal instinct. In a market with a lot of anxiety, panic selling nearly always results in violence.


  1. Never take anything for granted in life. You will make significant earnings when circumstances are good, but occasionally you will be shocked. Unfavorable occurrences, like the COVID-19 pandemic, can cause the market to lose more than 30% of its value in a matter of days. This highly represents a person’s life, in which there will be many happy days interspersed with terrible incidents. You must have the fortitude to get back up and keep going because recuperation will inevitably follow.

Taking Control of the Future

The most effective strategy for increasing money is investing. Even though your salary rises yearly, if you don’t invest, your money will stagnate while the wealth of others grows. It can be challenging to put money into investments when you want to spend it. Still, you can have the financial future you’ve always wanted by being financially responsible and investing now.


Choosing where to direct your money can be empowering. By investing, you give your money “work” to do—make you wealthier over time—instead of spending it or, worse, not knowing where it is going. However, investment is not about becoming rich. It’s about creating a safety net for your finances. You’ll have to give up your job at some time in your life. There is no better time to start investing than now if you want to achieve that financial freedom.


In the future, you might also want to assist your children or grandkids create their own families and paying for their education (perhaps through a registered education savings plan). You’ll have a higher chance of achieving these financial goals if you start saving early. Therefore, start thinking about tomorrow today to do your future self and your loved ones a favor.


Building wealth is easier the earlier you get started. Sure, there will be challenges, particularly when you first start, but the truth is that you can’t wait for things to get more straightforward than they are right now. You have less spare time and energy as you age. Start modestly with your investments and give them time to grow to make it easier. One of the finest choices you can make for your financial future is to start investing early.


By investing at an early stage of life, you learn a pattern of financial independence and discipline. An early investment teaches the real difference between investments and saving. Never think young age is a barrier to making an investment, as you are never too young to invest. The little amount of money invested now will put more money in your pocket in the future.


Nowadays, most young adults find opportunities to start or operate a business which is a good idea for them to earn money and sustain their needs. It is highly recommended that you start to invest in memorial lots as early as now, while you still have plenty of time, and the price is still flexible.



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Peace and love to you.

Gracia Amor
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