How to Start Investing at an Early Age

October 18, 2022
Investor's Guide

How to Start Investing at an Early Age

how to start investing at an early age

When you’re in your 20s, it’s easy to think that you have plenty of time to start investing. After all, you’ve just started your career and you have your whole life ahead of you, right? Wrong. There are many compelling reasons to start investing at an early age. Here are three of the most important ones.

Why Invest in Your 20s 

1. Time Is on Your Side

One of the most important reasons to start investing in your 20s is that you have time on your side. Compound interest is an incredibly powerful tool that can help you grow your wealth over time. The earlier you start investing, the more time your money has to grow. For example, let’s say you invest PHP500 per month for 30 years. If you earn an annual return of 10%, you’ll end up with around PHP1 million at the end of those 30 years. But if you only start investing in your 30s, you’ll end up with less than PHP400,000—even if you continue investing PHP500 per month for the next 20 years. 

2. You Can Afford to Take More Risks

Another reason to start investing in your 20s is that you can afford to take more risks. When you’re young, you have more time to ride out the ups and downs of the market. And if you do happen to lose money in the short term, you’ll have plenty of time to make it back before retirement. 

3. You Have a Long Investment Horizon 

Investing isn’t just for people who are near retirement age. One of the best times to start investing is when you’re young and have a long investment horizon. This is because you can afford to take more risks (as we just discussed) and because compound interest will work its magic over a longer period. So, if you’re in your 20s and looking for a place to park your money, consider investing it instead of keeping it in a cash savings account. Just remember to start small and scale up as your earnings grow—and don’t put all your eggs in one basket!

Things to Invest in at an Early Age 

Equity Funds 

InLife’s equity funds are investment vehicles that offer exposure to a basket of stocks representing a particular index or sector. Equity funds are typically managed by professional money managers who attempt to beat the underlying index by picking stocks that they believe will outperform the market.

Peso Money Market Funds 

InLife’s Peso Money Market Fund is a mutual fund that invests in peso-denominated short-term debt instruments. The fund has a low minimum investment requirement and provides investors with liquidity, safety, and yield. It has a strong track record of performance, delivering consistent returns to investors.

Balanced Fund 

A balanced fund is an investment fund that pools together money from many different investors and then invests in a mix of assets, including stocks, bonds, and cash. The benefit of investing in a InLife’s Balanced Fund is that it offers diversification. By investing in a mix of assets, investors can help to protect themselves from losses if the prices of any one asset class falls.

How to Start Investing at an Early Age 

One of the best ways to prepare for retirement is to invest in a life insurance and investment plan. By doing so, you can ensure that your loved ones will be taken care of financially in the event of your death. In addition, your investment will grow tax-deferred, providing you with a nest egg to draw upon in retirement. And because life insurance policies are typically level premium, your payments will remain the same throughout the life of the policy!

Talk to an InLife Financial Advisor to get started.

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