Like many skills in life, investing yields the best returns if started early in life. This gives you the ability to take risks and make mistakes while you still have time to do so, because if you wait until you are older in life, it is much harder to risk your valuable money. Chris Linkas, a veteran in the financial industry for over 15 years, preaches this principle to young audiences he speaks with and writes to.
One of the largest advantages of starting early with your investing is that you’re able to take advantage of the incredibly powerful concept of compound interest. Compound interest in when you essentially earn interest on your interest, so you are reinvesting your earnings back into the investment asset. This will help you exponentially grow your investment portfolio, and the earlier you start, the greater effect you will see.
This idea of taking advantage of compound interest in something that Chris Linkas often tells his young audiences. By investing early in your life, you are allowing your capital to gain more interest and dividends, and if you then reinvest this interest and these dividends back into your assets, you are able to increase your capital and grow your returns substantially.
Along with the power of compound interest, Chris Linkas often mentions that investing early on in your life gives you the time and opportunity to make mistakes and take on riskier investments with larger yields. Even if you lose your money in a risky investment, you have the time to recover that capital and invest it again. If you wait until you are older to start investing and you lose your capital in a risky investment, you don’t have as much time to rebuild your portfolio.
Chris Linkas also states that this extra time allows a young investor to be able to learn more about the world of financial investing and be more prepared to manage their portfolios throughout their lives.
The ability to learn, make mistakes, and also take advantage of compound interest are all great reasons to start investing early.