The Importance of Investing Early – Maybe there are still many young people who wonder about the importance of investing from an early age. Why should it be done as early as possible? Because by investing you can get a lot of benefits.
Investment profits will be useful for future needs, for example, can be used as an emergency fund or pension fund. So that you understand more about the importance of investing, you should see the full reasons below.
Reasons for the Importance of Investing Early
One way to invest is by doing funding in the microfinance marketplace. Through this platform you can get a fairly high profit and of course it is safe. Before making an investment, you should first understand some of the reasons for investing as early as possible.
1. Increase Value for Money
The first reason is to increase the value of money because through investment you can make a profit. So from this profit the value of money will increase from the previous value.
For example, 5 years ago you invested IDR 10 million in a microfinance marketplace with an average yield of 15% per year. Then the possible profit that will be obtained is IDR 7.5 million.
From this example, it can be seen that the value of the investment money has increased to Rp. 17.5 million, is it big enough? That’s why it’s important to invest early.
2. Increase Assets and Wealth
As discussed earlier, investments can add value to money. That way, your assets and wealth will increase from their original value.
So, don’t hesitate to start investing now because the benefits are quite large for your financial condition in the future. You don’t have to start with a large amount, just start with a small amount but do it regularly.
3. Adding Sources of Income
By investing, you can get an additional source of income outside of income from work. Having more than one source of income can speed up achieving what you want to achieve.
Although investing can bring in additional income, you need to know which investments are safe and which are not. In order not to be deceived or suffer losses, that is why it is important to be literate in investment for the younger generation.
4. Get used to living frugally
Is your money easy to run out even though it’s not yet the end of the month? Maybe you are the type of person who is extravagant and less careful in managing finances. Then how to solve it? It’s easy, try to get used to setting aside money to invest. For example, you have an income of IDR 5 million and then to meet basic needs and pay installments of IDR 3.5 million. That means the remaining IDR 1.5 million, try not to use the money to buy something.
Directly invest in the microfinance marketplace to fund MSME actors who need business capital. Do it regularly, later you will get added value from the investment. Although the investment value is not large if done regularly, over time it will bring considerable profits. That’s why it’s important to invest early, even if you start small.
5. Prevent Sandwich Generation Chain
What does the sandwich generation mean? The sandwich generation are people who have to meet the economic needs of themselves and their families. So, it can be likened to them being squeezed between two economic needs.
The emergence of the sandwich generation was triggered by the lack of awareness of old people about the importance of pension funds. So that their children have to bear the cost of living during their old age. By investing early, you can start preparing for retirement funds for old age. That way, your children will be free from the chain of the sandwich generation.
After understanding the importance of investing early on, you will be better prepared to face future financial needs to meet financial goals.