In today’s world, few people can get by without money.
With enough money, you can:
- Travel the world
- Quit your job
- Retire early
- Migrate
- Study overseas
- Start your own business
Money can open up many options for you, but how can you accumulate money? One of the best ways is through investing and compounding the money you have.
You can see the power of compounding below:
- Initial Capital
- $10,000
- $10,000
- $10,000
- Annual Return
- 1%
- 3%
- 6%
- Total Returns After 20 Years
- $12,200
- $18,000
- $32,000
- If you have $10,000 compounding at 1% per year, the sum will only grow to $12,200 after 20 years.
- In comparison, $10,000 compounding at 3% per year would become $18,000 after 20 years.
- And $10,000 compounding at 6% per year would become $32,000 after 20 years.
Is 6% return per annum over 20 years difficult to achieve?
The answer is no, yet many people are reluctant to start investing.
Common Excuses for Avoiding Investing
- There is still time
- I don’t have money
- I am afraid to lose money
- I will wait till I strike Toto or 4D
- I can rely on my spouse and my parents
- It is too complicated
There Is Still Time
Putting off investing is like putting off studying for an upcoming exam. Sooner or later, you will need to face reality. By the time you are forced to “revise”, the results might not be pleasant.
Nobody likes last minute studying. Last minute investing is even worse, because your chances of success will be lower. Schemes which allow you to get rich in a very short time usually involves great risks. The later you start investing, the harder it is to save up the amount you need.
There’s a popular Chinese proverb that says: “The best time to plant a tree was 20 years ago. The second best time is now.” Basically in the context of the conversation here today, this means that if you want success and growth in the future, the best time to act is NOW.
I Don’t Have The Money
Warren Buffet, one of the most successful investors in the world, did not start off rich. Like many people, he wasn’t born in a rich family. He worked hard and eventually made a fortunate through investing, so there is no excuse why you can’t start small. If you diligently save and invest well, your investments will accumulate over the years.
I Am Afraid To Lose Money
Many people fear losing money. Sometimes the fear is so great, it prevents them from doing any form of investment and miss out many good investment opportunities.
While it is true that investing involves risks, risk can be reduced by increasing your knowledge and experience.
Like learning to ride a bicycle, it can be scary. In the beginning, you may fall and suffer some hard knocks. However, once you mastered the basics, riding the up-slopes and down-slopes can be fun.
If you are uncomfortable, you can start small but don’t give up. Keep persisting and you will see that investing through the ups-and-downs of the markets is not that scary.
Toto and 4D
If you’ve purchased Toto and 4D before, you know the odds of winning the top prize is very slim. This isn’t a reliable way to grow your wealth.
Spouse and Parents
If you’re lucky enough to have a wonderful spouse or parents to support your finances, it doesn’t hurt to learn more about investing on your own.
It Is Too Complicated
Do not let fast talking analysts on TV scare you. Investing does not have to be rocket science. While you need to learn the basics, you are not aiming to become an investment guru.
Investment instruments like unit trusts can also make your task easier because it is managed by professional fund managers.
Conclusion
Making the first step into the investment world can be daunting, but the potential rewards can be well worth it. If you need assistance, talk to an experienced financial planner today.
