When you’re young, your financial future is an open book waiting to be written. It’s easy to think that investing is a concern for later years, but here’s the secret: even a small amount set aside each month can transform into a financial windfall over time. The magic ingredient? Compound interest.

Whether you’re young and single or navigating the exciting challenges of homeownership and parenthood, this article is your guide to unlocking the incredible potential of early investing. While KiwiSaver is undoubtedly a valuable tool, it’s just the beginning. Building your own investment strategy can offer you financial flexibility that KiwiSaver alone can’t provide.

In the pages ahead, we’ll delve into the compelling reasons why starting your investment journey at a young age is not just a smart move; it’s a strategic game-changer. Say goodbye to financial constraints and hello to a world of opportunities as we explore the key advantages of investing as soon as you start earning.

Unleash the financial magic: harness the power of compound interest

Compound interest is like a snowball rolling downhill –it starts small but gains unstoppable momentum over time. It’s your secret weapon in the world of early investing. To illustrate the incredible power of compound interest, consider this scenario:

You kickstart your investment journey at 25, dedicating $1,000 annually for 10 years. Assuming a modest average annual return of 7%, by the time you hit 65 your investment will have blossomed into an astonishing $176,000. Now, let’s flip the script. If you wait until you’re 35 to begin investing the same amount annually, you’ll be looking at just over $82,000. That’s a potentially life-changing difference, all because you decided to take action earlier.

Invest today, thrive tomorrow: building financial discipline

Investing at a young age isn’t just about watching your money grow; it’s a masterclass in cultivating financial discipline. By prioritising investments and ‘paying yourself first’, you forge a solid foundation for money management. Instead of treating savings as an afterthought, you make it a proactive habit, instilling financial responsibility and securing your financial future.

Small steps, big dreams: a little can go a long way

Throw away the misconception that you need to be wealthy to begin investing. With guidance from a financial adviser, many managed funds allow you to start with modest contributions. This means you can launch your investment portfolio early on. As your income grows, you can steadily ramp up your investments. It’s proof that even a small trickle can lead to an ocean of financial opportunity.

Embrace the risk, reap the rewards: youthful advantage

Young investors hold a trump card—the ability to embrace more risk in their portfolios. Why? Because they have the luxury of time to recover from market fluctuations. While all investments carry some degree of risk, youthful investors can ride out the market’s ups and downs with confidence. Over the long haul, history shows that the sharemarket delivers robust returns, making it easier to weather short-term turbulence.

Time is money: sooner is better than later

Your future self deserves the gift of financial security. Procrastination is the enemy of wealth-building. The sooner you start, the more time your investments have to flourish. Even small contributions can blossom into substantial wealth when given enough time to compound. Remember, time is your ally in the world of investing—don’t squander it by waiting too long.

Don’t navigate alone: seek professional guidance

Investing might seem like uncharted territory, especially for newcomers. That’s where Apex Advice steps in. Our financial advisers are your compass, guiding you to create a tailor-made investment plan, assess your risk tolerance and recommend the most suitable investment avenues. Seeking expert guidance not only safeguards against costly mistakes, but also ensures your investments align seamlessly with your financial aspirations.