For people who invest at a young age, time is on their side. Young adults have more time for their investments to compound than an older adult, so they have a chance to make more money. In a hypothetical scenario, if a person at the age of 40 invests $5,000 to start with a 3% annual interest rate and plans to cash out by the retirement age of 65, that $5,000 will have turned into $10,468. If a young person, say the age of 21, invests that same $5,000 with the same interest rate then by the age of 65 it will have turned into $18,357, almost twice as much as the 40 year old. The young person didn’t strategically do anything different, the young person just had more time for their investment to compound.
Younger people also have more time to tackle the investment learning curve. Good investment strategy is not something that people can learn over night. Older people have responsibilities to worry about (see the next tip) and have less time to experiment on the market.
One person who learned about investing at a young age is a man named Chris Linkas (Linkedin). His experience led him to being the head of a commercial real estate funds group in New York. He then went on to becoming the European Head of Credit, over a 20-person European credit group.
Another good reason to invest at a young age is that younger people can take more risks on high yielding investments than older people. Young people have more time and energy to bounce back from a risky investment that may have gone wrong. They also don’t have as many responsibilities to be concerned about. Older people have retirement looming over them, as well as families, mortgages, and other responsibilities to be concerned about so in most cases they aren’t in a good position to risk losing money. In short, investing at a young age can lead to a better financial future.
Igor Cornelsen recommends that investors take interest in what they are investing in. These people are going to be able to maximize their return on investment if they don’t know what they’re even putting their money into. This can be tempting for investors that have busy schedules. It can be a great temptation to simply put your investments on autopilot while your broker makes the decisions about what you are putting your money towards.
This is easily one of the worst ideas that any investor can have. It is never okay to not have a clue about what your money is being invested in. Investors should always take the time to see what they are putting their money in for their retirement years. They need to know if there is something else that may be performing much better than the investments that they have chosen.
Something else outside of the United States may give you a high rate of return when American investments aren’t doing so well. This is Igor Cornelsen what is emphasized when it comes to international investing. Igor Cornelsen has done this for years in Brazil, and he is well aware that this can make a big difference in your overall portfolio performance. It is good to get this type of investment strategy in mind because it plays a big part in long-term growth for any investment.
There are times where your investment strategy may need to change. If you have been a very aggressive investor in your early years it may be time to switch to much more moderate growth as you get closer to retirement. The investor that has been too afraid to go into a moderate investment may need to finally bump things up from the slow growth investment strategies that they were using. The person that is at the moderate level may need to pull up to a high-risk investment just to get a feel for what they may be missing with their comfort of moderate investment options. All of these things have a overall effect on the outcome of the long-term investments. https://about.me/igorcornelsen1