A year from now, you may wish you had started today!
One of the most common mistakes that people make is postponing their investment decisions. Excuses are endless: "There's not enough money to save" or "I am still young and have plenty of time later" or "I don't have time".
Think of it this way, the earlier you start the more time you have to achieve your goal. Look at the table below. You could either start a saving program now with $50 a month investing at an average rate of return of 8 per cent to get $29,451 in 20 years time or you can choose to wait 10 years from now but then you will have to put aside $150 each month and even then, end up with only $27,442 in 20 years from now.
One may claim that 8 per cent return is too high or unrealistic! However, our stock market has generated a median return of over 10 per cent for five-year holding periods from a diversified portfolio of securities over the last decade! Last year itself, the stock market generated an average return of 8.8 per cent. Some share investments have performed at even higher rates of return. One company that listed in 1997 has given investors an average return of 21.3 per cent per annum. Another company has given investors average returns of just over 30 per cent per annum since 2000.
Note that our focus is to illustrate returns, not to give specific advice. To harness the power of compounding is not to wait but invest at regular intervals.
So stop procrastinating and call a licensed broker now. For those in the West, the good news is that we will be holding an investment consultation session on Thursday, 23rd August at Tanoa Waterfront Hotel in Lautoka from 1pm. Register now and start your financial planning today!