3583: When is the Best Time to Start Investing? by Enero Febrero with Len Penzo on Investing Early

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[00:00:30] This is Optimal Finance Daily. When's the Best Time to Start Investing by Len Penzo with LenPenzo.com. For many young adults, their first experience with investing doesn't happen until sometime after they get their first job. But if your goal is to maximize your returns, then it would be better to begin sooner. Although most young people don't have much money to start out, it doesn't take much to begin investing in stocks and mutual funds.

[00:01:00] which can then grow over time through compounding interest. The fact is, there's no ideal time for young adults and students to start investing. Every individual has a different financial situation, and every person's needs change as they grow older.

[00:01:16] However, saving and starting early can be good for building wealth. But the same strategy might be bad for a later in life saver. In other words, the best time to begin is when you can afford to do so without putting your education or career goals at risk.

[00:01:32] Students have several options when it comes to investing, such as putting money into an exchange-traded fund or ETF, a college savings plan like a 529 plan or a Coverdell Education Savings Account or ESA, or a Checking Account or a Checking Account with the Intention of Buying Shares After Graduation.

[00:01:56] It's up to each individual to decide when the best time is for them to start. But if maximizing your returns is important to you, and you have enough cash flow, then start as soon as possible. With that in mind, let's take a look at some basic recommendations from experts about student investing. Start early. Experts agree that it's never too early to begin investing in yourself, and it's never too early to start building up a nest egg for retirement.

[00:02:25] If you've got the discipline, now is the time to kick off saving for your future financial security. You don't want to wait until things get tight later in life, or until it's too late to build up your savings. To this expert opinion we add, your early may be entirely different from someone else's early, so make sure you're comfortable with the money you have before making your first move. Do your research first.

[00:02:52] You should also take some time to do some research before you jump right into investing your money. It might be tempting to just buy whatever's popular at the moment, but if you don't know what makes a good choice and what doesn't, then maybe it's better to wait and study up before making any decisions. Treat this process as a learning experience. It's important to put your money into something that you understand and that has growth potential. When choosing potential projects, do some research on the company and its fundamentals.

[00:03:22] Research the competition or other companies in the industry. Also, check out whether there is any news regarding the company that may affect its stock price, either positively or negatively. Consider future plans and goals. Investing for the long term is important, but so is planning for short-term goals. Doing so for retirement is great, but you need to also plan for your present needs.

[00:03:49] Who knows what will happen in the future, but certain things are necessary now that shouldn't be put off because of your desire to start early. For example, budgeting for a house, a car, or even a special trip should never be put on hold because you want to invest right away. Instead, be sure to do both. Save early and often so that you can build up your nest egg and also budget for short-term goals. Here's a quick tip.

[00:04:16] Consider opening an additional savings account if you still haven't done it, one specifically dedicated to investing. This will help ensure that your savings are going towards investment opportunities and not everyday expenses that can be covered by another account. A few more key points to consider. The stock market can be a scary place for students. After all, you can lose money.

[00:04:42] Most experts agree that the time to kick off investing is when you have enough money to be able to take the risk of losing it. If you have a couple of thousand dollars in savings or are willing to get a part-time summer break job to save up, you're probably ready to start investing. The first step is choosing an investment account. If you're under 18, your parents will probably have to help set it up so that you can open an account with their permission.

[00:05:09] Some banks offer special accounts for young investors, but there are other options available. For example, you might be able to open an account at your school or job if you're employed. You can also ask a family member to help you set one up. Once you have your account set up, there are two basic strategies to follow, growth and income. Growth investing means buying stocks of companies whose products and services you like and believe in.

[00:05:35] Income investing means buying bonds from the government or from corporations that promise regular payments on your money. In other words, interest. The bottom line The bottom line is that it's never too late, even if right now you're at the beginning of your journey. You may not have as much money to play with as someone who's been doing so for years, but any amount helps. The earlier you begin, the more time your investments will have to compound.

[00:06:03] And as time passes, you'll be able to sit back and watch your portfolio grow. You just listened to the post titled, When is the best time to start investing? Buy a narrow for Brero with LenPenzo.com Summer's almost here and I've been daydreaming about our next vacation, not stressing about whether we can afford it. That peace of mind comes from organizing my finances, so I can enjoy the trip knowing the money's handled.

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[00:07:28] Get two times membership rewards points per dollar on eligible purchases and key business categories, as well as on each eligible purchase of $5,000 or more, on up to $2 million in eligible purchases per calendar year. American Express Business Platinum. There's nothing like it. Terms apply. Learn more at AmericanExpress.com slash business dash platinum. It took me a long time to become comfortable with investing.

[00:07:57] I think my main issue was lack of education and understanding. And it was difficult to overcome this because everything I read about investing seemed overcomplicated and couldn't hold my attention. This is why I continually recommend the book, The Simple Path to Wealth by J.L. Collins. This was the first book I read that made the topic simple, accessible, and interesting.

[00:08:22] Most importantly, it gave me the foundational knowledge to be a confident and competent DIY investor. J.L. started writing when he was trying to teach his daughter about money. And she replied, Dad, I know money is important. I just don't want to spend the rest of my life thinking about it. I think the best time to start investing is as soon as possible, because I now understand the power of compound interest. The single biggest factor in winning with investing is your time horizon.

[00:08:52] So the longer your money is in the market, the better. I'm also convinced that it's not possible to build wealth without investing. So if your goal is financial security and creating options for yourself, it's extremely important to prioritize this. However, I needed to take the time to educate myself so that I could feel comfortable in my decisions. Once I finished the book, The Simple Path to Wealth, things moved very quickly.

[00:09:20] But that should do it for another edition of Optimal Finance Daily. I'll be back tomorrow as usual, so I'll see you there on the Friday show where your optimal life awaits.