why you should invest early in Stock Market

"I made my first investment at the age of eleven. I was wasting my time until then."

– Warren Buffet

 

When you start investing in the stock market, you take your first step towards wealth creation and a secure future, and that's why investing early is so important so you won't have to work after retirement. Investing in the stock market at such an early age as Warren Buffet is not for everyone, but the 20s are a great time to get started.

 

Therefore, learning the basics of investing in the stock market is the best thing you can do for yourself in your 20s to become financially independent in the future, and therefore learning stock market basics can be a really fruitful investment in yourself. Investing in the stock market early will pave the way for a better future. However, beginners in their early investing careers may not have financial literacy or may not be experienced in the field of the stock market so it becomes important to learn stock market basics.

 

You can refer to a stock market basic course which will cover all the stock market basic terms which will help you to make decisions while investing in the stock market.

 

 

Benefits of Investing in Early age:

Investing in your 20s Provides better financial security in the future as starting early enables you to generate more wealth by the time you retire. Compounding effect increases Inculcates the habit of investing and keeps your spending habits in check.

Investing in your 40s Reduces your wealth in the future as the investment time frame decreases and you invest consciously avoiding risks, when you grow older you have other responsibilities reducing your risk-taking appetite. Compounding effect decreases Late investing could lead to overspending resulting in fewer savings by the time you start investing.

 

The stock market is like a test match. Whether you want to play the game safely like Pujara and stay invested in the market for a long time beating the volatility of the market or if you want to take risks and play faster like Pant and earn more profits in less time, it has something for everyone. The only thing you need is proper stock market knowledge and a basic understanding of how the market works.

 

In order to start investing in the stock market, you need to have a bank account in the first place. After that, you will have to open a Demat account. A Demat account is an account where you will hold your securities in a digital and it also helps you to keep a track of all your investments. You will have to link your bank account with your Demat account  At StockDaddy, we have multiple options for stock market beginners where they can choose among multiple brokers, then open a Demat account and start their investment journey.

 

Although there is no right time to start your journey in the stock market, the earlier you start, the better profits you could earn with the help of the compounding effect but stock market basic knowledge is a prerequisite for success in the stock market. However, there are certain DO’s and DONT’s of the Stock market which you must need to keep in mind before investing in the stock market.

 

The later you start investing, the safer you invest as you become more conscious while investing and look for safer avenues to invest in with stable returns rather than riskier avenues with higher returns and you have less time to earn profits from the market as the effect of compounding decreases with the decrease in the time period.

”Compounding is the eighth wonder of the world, who understands it, earns… who doesn’t… pays” — Albert Einstein.

 

Compounding increases the chances of you having a huge amount by the age of your retirement and also, early investing gives you the benefit of risk-leveraging and higher returns on long-term investments because of compounding effects.

 

 

Unleash the power of compounding: Compounding is one of the best ways of making money and it is also called the secret of making money. To make the best use of compounding the early you start investing the better it is.

 

For example, if you start investing from the age of 30 and invest Rs.5,000 monthly in SIP for 30 years till age 60, then your total investment will be 18 Lacs and your retirement amount will turn out to be Rs.1.76 crore at 12% pa. In contrast, if you start investing at the age of 40 and invest Rs.15,000 monthly for 20 years till age 60, then your total investment will be Rs.36 Lacs and the retirement amount will be around Rs. 1.50 crores at 12% pa. That’s the power of investing.

 

However, beginners in their early investing careers may not have financial literacy or may not be experienced in the field of the stock market so it becomes important to learn stock market basics. A stock market course for beginners will cover all the stock market basic terms which will help you to make decisions while investing in the stock market. The best thing you can invest at your young age is not money but time, so always be curious, try new things, and don’t be afraid of taking risks.