Best Time for Financial Planning

Best Time for Financial Planning

11 Jul 2018

Best Time for Financial Planning

Legendary investor Mr. Warren Buffett got into the investing game at a very early age. He bought shares of his first stock — Cities Service for $38 apiece — at the young age of 11 years. Since then, the investing legend has amassed a fortune of $75 billion and in the process, has become one of the richest men in the world.

What he's learned since buying his first stock in 1942 is to buy, hold and not watch the markets too closely. Markets go up and down every day, but that doesn't necessarily mean there's significance to every move. As an investor, it helps to be patient, and to accept a certain level of uncertainty.

One of the most important things that you can do as an investor is to get an early start on investing. The old saying “The early bird gets the worm,” certainly applies to investing in a big way.

Investing is defined as making an investment in order to earn a profit, and earning that profit will be much easier to earn if you get an early start. Investing at a young age isn’t always easy, but the benefits are numerous and can’t be overlooked.

Your early 20s are possibly the best time for financial planning. Let us now look at five of the prominent benefits of investing at a young age:

  • Time is on your side - If you begin investing at a young age, history tells us that you will end up with far more than those who invest later in life. Having time on your side means having a longer time period of being able to save money to invest and a longer time period of being able to find investments that can significantly increase in value.
  • Compounding returns - Put more simply, this is the power of the time value of money. Regular investments in an investment portfolio or a retirement account can lead to huge compounding benefits.
  • Improves spending habits - Those who invest early on in life are much less likely to have issues with overstepping their boundaries in spending over the long run.
  • Ahead of the personal finances game - If you are a young investor, you are putting yourself ahead in the world of personal finance as a whole. By growing your investments over a considerably longer period of time, you will be able to afford things that others can’t.
  • Quality of life - By investing early in financial instruments such as Retirement Accounts, you should be able to avoid having to make frantic moves later on in life i.e. near to retirement or during retirement itself.

It is important to note that saving money to invest at a young age isn’t easy, but you simply can’t afford to wait to invest when it is convenient.

You are more likely to be successful when you begin the development of a financial strategy for your future at a relatively younger age.

Early planning forces people to study and examine important topics such as taxes, saving, retirement, budgeting, children’s college, purchasing a house and family planning.

Savings is the best habit and this is how investing basically starts; let us now examine a few ways as to how to kick-start the savings journey:-

  • Do make a budget even if you might not have much money to start with initially
  • Keep a record of your money by using a budgeting app, a diary or an excel sheet
  • Budgeting will help you to save first and spend later
  • You must set important financial goals (like buying a house or money for retirement) at a younger age ; financial goals bring the much-needed intensity in financial planning
  • Do avail term life insurance to cover risks and a health insurance plan to cover any emergency hospitalization expenses.

It can cost a lot of money if you delay your financial planning and you will also have lesser time to attain all your financial goals. Any financial plan is dependent on your goals or change in priorities. Thus, thoroughly analyze your financial goals and modify your financial plans per your unique needs and the prevailing circumstances.

Founded in 2005 by new–age entrepreneur Abhishek Bansal, the Abans Group has evolved into a globally diversified conglomerate, providing expertise in Broking Services, Non-Banking Financial Dealings, Financial Services, Agri-Commodity Services, Warehousing, Realty & Infrastructure, Gold Dore Refinery & Manufacturing, Trading in Metal Products, Pharmaceuticals, Software Development & Wealth Management. The Group is a comprehensive financial and non-financial services and solutions provider, aiming to provide end-to-end solutions to its clients.