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Investing: Why you should start young

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The following is an article on investing by guest blogger, Neo Pok Chow, a 21 year old Singaporean trader and is the creator of http://www.optionssingapore.com/. If you want to have a better financial future, you’re welcome to learn about investing for free on his site.
 
Young people are often unaware or even clueless about their finances or money matters. Their school doesn’t teach them how to invest. Their parents don’t teach it either. Their peers have no clue. So to be fair, how are they suppose to know about it? This is actually a worrying sign. Ignorance, in this case, is not bliss. Ignoring your finance is foolish.
Young people need to realize that their age and time they have is their biggest attribute. They’re young and they enjoy their life hanging out and playing all around while being shielded by their parents. They fund their expenses using their pocket money and the occasional part time job during holidays. Life is good! They’re having fun! Why should they care?
stock investing
I’m not saying that young people should not have fun. I’m just saying that it is good to start learning about finance and investing from a young age as it is beneficial down the road. How would a young person know about this field of knowledge then? Well, that’s why you’re reading this right now. We can’t blame our parents for their lack of knowledge. We can’t blame the school for not including it in their syllabus. We can’t blame our friends for being clueless. With the plethora of information available on the internet nowadays, granted access, we can only blame ourselves for our lack of knowledge. [ Click here to learn what a Call is! ]
So to all the young people, why is it important to start young when it comes to investing? In this post, I’ll be going through 4 reasons why I think it is important. So if you’re a young person starting out, that’s good! Starting young is the biggest advantage you have in this financial journey. The 4 reasons I’m going to go through are clear advantages that you have. However, If you are not so young, don’t just ignore the content I’m about to share! If you have any children or young people that you may know, you can make a positive impact in their lives by encouraging them to start early. Inform them about the benefits and hopefully convince them to do so. If you have the knowledge, intrigue and stimulate the young minds! Make them have an interest in their own financial future.
Clear Mind
When you’re young, your mind is still pretty much clear and unpolluted. This is the actually the best time to pick up new knowledge and skills especially in the financial world where there are a lot of noises to clutter up your mind. There’s no unproven financial axiom or out-dated believes imprinted in your mind. You will start with a virgin mind. People who are older, whether they know it or not, tend to have bad habits planted in their subconscious mind by the many financial media all around. So it is always good to start fresh!
Fast Learner              
Do you sometimes find that adults learn things really slow? Or they can’t adapt to new technologies as fast as you can? It is a proven fact that the older you get, the slower you learn. By starting young, you stand to benefit from this fast learning advantage that you have. Young people can pick up concepts faster; learn new domain skills quicker. This would allow them to spend less time struggling trying to grasp basics or foundational knowledge that is the essential building block of a successful financial future!
Compounding Effect
I remember learning about compounding interest in primary school. Compounding in investment basically means putting your money back into your investment so that the next time it generates a return, it would already be on the bigger principle sum.
Compounding is usually calculated year on year. So if you are younger, naturally you have more years ahead of you to allow your money to compound. The longer it compounds, the bigger your sum would be in the future! Start caring about your finances! Start the compounding early!
Small Capital Small Loses
Young people have small capital. And when it comes to investing, it is always good to start small. If you are new, don’t jump in with a big part of your savings and expect everything to be a smooth sail. Start small to test the water first. This way you can get to practice new strategies, hone your skills and awareness without having a big draw down. You live to invest another day! When you get better, you can then decide to up your investing size a little bit.
That sums up the 4 reasons. Quick story, I just turned 21 years old and I have been actively trading for more than half a year now. No matter how much I wish my parents or school had notified me earlier, as I mentioned earlier, we can’t blame them. I can’t change the fact that I didn’t learn how to invest when I was younger. I can’t go back in time! So it’s good if you’re starting young. But no matter which stage of life you’re at now, it’s never too late to start. Think about the things you can do, rather than the things you can’t do.

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