Unfortunately, investing early is not on everyone’s minds, believe me. Many people don’t start thinking about saving and investing significantly until their 30s, 40s or later. The general concept in your younger years is to enjoy life, buy and furnish a home, pay off student loans and more. For many, there just does not seem to be ample funds leftover to even thinking about saving and investing. Therefore, many people in their young adult years live paycheck to paycheck without saving or investing any funds. However, if you plan to retire by age 37, it is important to get investing as early as possible.
Just How Early Is Early?
The goal to retire by age 37 is a lofty one. After all, the average retirement age in the United States is 62 years old. In addition, by their 40s, the average American has only saved $63,000 for retirement. While retiring well before your peers is a challenging goal to meet, it is attainable if you start saving and investing your money at an early age.
However, you may be wondering just how early you need to start investing. It is never too soon to invest. Your chances of retiring by age of 37 are dramatically increased if you begin investing as soon as you start working. You can invest in your 401k account, purchase income-producing real estate, buy dividend-producing stocks and more.
Reasons to Start Investing Early
There are many ways you can spend your money in your younger years. However, there are also many reasons why you should start investing your funds rather than spending them. Investing your money as soon as possible can be a life-changing move to make. In fact, here are some of the top reasons you should invest early, as I found them.
1. Reach Your Early Retirement Goal
You have your sights set on retiring by age 37, and you cannot expect to amass a portfolio to live on overnight. If you want to retire early, it is imperative that you get started as soon as possible. This may be something as simple as adjusting your retirement account contributions to start with. Evidently, you can expand your efforts in the coming months to include real estate investments, non-retirement stock account investments and more.
2. Enjoy the Benefits of Compound Interest and Dividend Reinvestments
You may have heard that your money can work for you, and this is entirely true. However, your money needs ample time to work for you. Through the effects of compound interest and dividend reinvestments, your money will create revenue that you can re-invest as needed for increasing growth. The new money that has been created for you will then continue to make more money, and so on. When you start investing early, you can reap the rewards of this incredible growth process more significantly.
3. Get in the Habit of Investing Regularly
Investing money, unfortunately, does not come naturally for many people. It takes regular practice. When you start investing at a young age, it becomes a beneficial habit. It’s one that will pay off substantially over the years. Now is the time to start investing your funds. Stop spending money on frivolous things that do not help you achieve your retirement goals.
4. Avoid Unhealthy Spending Habits
The typical impulse is to spend everything you earn to enjoy living in the moment. However, when you are focused on investing and saving, your attention is diverted away from spending money and taking on debt. Many individuals are buried in debt by their 30s. Focusing on saving rather than spending can help you avoid unhealthy financial behaviors that can impact your life negatively.
Benefits of Investing Early
Investing earlier in life has numerous benefits that you can enjoy now and for years to come. It is often not easy to start investing your funds early. This may be because you are just starting out and need to establish a home, pay off your student loans or pay for other expensive items. However, it also may be because you are living an escalated lifestyle.
You may be able to scale back your lifestyle to save and invest more money. Making the decision to invest now can actually change your life in significant ways that your non-investing peers likely will not enjoy. These are some of the benefits that you can enjoy when you choose to invest earlier in life rather than spend your money.
1. Your Money Has Time to Work for You
Your investments can make money for you, and they will generally make an increasing amount of money over the years. Investing earlier gives your money the opportunity to start working for you at an early age. This power can increase exponentially to help you amass great wealth.
2. You Can Retire Early
Retiring early can be a dream come true. However, it is not something that will materialize for you without hard work and a great investment strategy. When you retire at the age of 37, you will be able to enjoy a dramatically different lifestyle than many of your peers don’t have. You can spend your days on your terms, travel to new places and enrich your life in various other ways. However, you must contribute funds to new investment purchases on a regular basis. You must also remember this. Start at a young age if you want to reach your retirement goal!
3. You Can Enjoy an Improved Lifestyle
By investing early, you are making the decision to improve your life. Each month, your net worth will increase through your investments. This can allow you to enjoy a more relaxed lifestyle that you otherwise would not be able to afford if you spent every dollar you earned on things that are not true assets. Keep in mind that savings and debt balances are correlated. Those who have higher savings and investment balances typically have lower debt balances. By carrying less debt, you can afford a more enjoyable lifestyle than your peers.
4. You Can Live Free of Financial Stress
Financial stress is common. Many people struggle with debt, and a lack of savings and investments is often a combining stress factor. When you invest early, your account balances will likely be substantial. Debt will not be an issue for you. Moreover, you can enjoy the peace of mind that comes from knowing that you are financially secure. This is a benefit that you can rejoice in for the rest of your life.
Investing early is something that not everyone launches into, but it is imperative to do so if you plan to retire by age 37. In fact, investing early is a critical step if you want to achieve your retirement goal. Take time to explore your investment options today. Re-position your budget so that more funds are diverted toward investments. By doing so, you will be on your way to achieving your retirement goal. Let me know what you think of my advice down below in the comment section!