Is age the single most important factor in investing?
When people talk about investing, one of the things that
they never fail to mention is how they should start young in setting aside
money for the future. Although this advice has its merits, analysts argue that while people in their 20s hold the prime age when it comes to
investing, it doesn’t mean that older people don’t have a chance to redeem themselves
and start saving up for their golden years.
So does age really matter when it comes to investing? Perhaps the question that we should be asking
is: is age the single most important factor in investing?
It’s always the best decision to start in your 20s and
doing so can guarantee the highest possible compound interest growth because compared
to their older counterparts, young investors have more time to accumulate money
and reinvest their earnings without worrying much about the risks.
However, age should not limit older people from getting
started on their investment goals. For instance, people in their 30s who put
off investing during their younger years can still have enough time to enjoy
the rewards of compound interest since they still have (presumably) 30-40
active years to earn and save up.
For investors who decided to start in their forties,
investing in aggressive assets like stocks can help them catch up. In fact, stocks should always be a part of your portfolio no matter how old you are. It’s true that at this age, people are already
at the peak of their earning potential and should take less financial risks.
However, they shouldn’t let it stunt their investment growth.
The lesson that we can learn from all these is that: age
should always be a factor in investment decisions, but it’s important to note
that investing strategies can always vary at different stages of our life.
To know more how to properly strategize on your
investments, seek a LOM Financial
advisor’s help now.
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