It’s never too soon to start saving for retirement! Unfortunately, it’s all too common that retirement savings are not made a priority by most young adults. The hesitation to start saving at a comparatively early age for retirement is understandable, given that as young adults we see so many working years ahead of us with the idea of retiring so many years away, that savings and retirement goals either get put off or not even thought about until it’s almost too late. Time is one of, if not the most precious commodity we have! Every second and every minute that goes by is time we can never get back and when it comes to money and saving, it’s the biggest advantage we have to reap great financial rewards for our future by starting good money habits early on. The habits of saving money as early, as often and even…as much as possible!
Don’t Wait to Start Saving Money!
One of the main reasons why young adults should start saving and investing as early as possible would be to reap the rewards of what would be sometimes known as the magic of compounding. Compounding is when you earn returns on past investment returns as well as on your own original capital investment. The compounding effect of returns can really grow in the long term, especially the extremely long term. The sooner you realize the effect that compounding has on the ability to make your money grow, the sooner you can reach your financial goals.
That’s the advantage of having time on your side by starting the good money habits of saving and investing early on in your life. Starting to save and invest as soon and as often as possible, with as much as you can during your working life is the best thing you can do for your financial future. It will ultimately be the foundation for your financial freedom. The thing with compounding is that it takes a long time to produce its best results. So even though patience will be needed, saving and investing on a regular basis to keep building your investment capital will help to accelerate the advantages of compounding.
“Whether you are just entering the workforce or nearing retirement age, planning for the future is critical.” – Ron Lewis
Seeing and understanding the value of time and compounding when it comes to your financial future is challenging as a young adult. When you’re young, you have your whole life ahead of you to not have to worry about it now. Or you feel like you don’t have the extra money to save, so you put it off! Unfortunately, what many young adults don’t see is that it is when you’re young that you are more able to better make the sacrifices that (at the time) you’re just not willing to make. But the thing to understand is that with a goal and a plan those sacrifices become challenges and those challenges can be met and overcome with the right attitude.
The fact is, at that point in your life when you’re young, is when it’s most advantageous to start saving early and often. Just imagine how great it would be if by the age of 40 you could say that you can retire if you wanted to! The flip side of that would be you scratching your head, saying at age 40, I’m not sure if I’ll be able to retire in the next 20, 25, 30 years! Which scenario would you prefer? The choice is yours! The more aggressive you can be with how early, how often and how much you save, will determine how soon you will be able to reach your financial goals and secure your financial future. The combination of time and money create an unbelievable opportunity for building wealth, don’t waste it!
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