Current:Home > NewsHave you started investing? There's no time like the present.-LoTradeCoin
Have you started investing? There's no time like the present.
View Date:2025-01-11 07:39:49
Have you started investing yet? Or are you waiting for the right time?
Investing can be one of those things that we view as a “someday” – someday you’ll have enough money to invest, someday you’ll be in the right job to invest, or someday you’ll find the exact right moment in life. Maybe you’re waiting to invest until after you pay off your student loans, or after you buy your first house.
The truth is that the best time in your life to start investing is right now.
It’s better to treat investments as a financial habit – just like paying your bills – rather than looking at it like an aspirational place you might get to someday.
Here’s why.
Compounding returns boost what you earn
The longer you have money invested, the more you’ll make. So it’s better to start investing now rather than waiting. By putting it off, you’re actually losing money in a sense. This is because of something called compounding returns. To put it simply, compounding returns basically means you earn money on both your initial investment and the money that investment earns, making your money grow faster over time.
To put it simply, compounding returns basically means you earn money on both your initial investment and the money that investment earns, making your money grow faster over time. For example, if you invest $1,000 and continue to contribute $100 a month for 30 years, assuming an 8% interest rate, that would turn into almost $160,000.
Time to give CDs a spin?Certificate of deposit interest rates are highest in years
Now, let’s look at that same scenario, but we wait five years to start. After 25 years, that same investment is only worth a little over $102,000. That’s a huge difference just from five years we didn’t invest. Investing now gives your money more time to grow and compound. If you want to see just how much of an impact time can have on your financial growth, try using a simple investment calculator. It can be fun and motivating to see what you can do.
Investing is also a surefire way to beat inflation. We all feel it every time we go to the grocery store - our money is worth less and less over time. This is especially true of money sitting in our checking account or savings account. Investing your money makes it work for you, so your money will grow faster than inflation. The earlier you start investing, the greater your spending power over the long haul.
CD calculator:Calculate your potential CD earnings
Rather than thinking about investing as a “someday” aspiration, start looking at it as a “right now” financial habit. Even just setting aside $50 a month towards your investments can make a huge difference by the time you’re ready to retire. Treat your investments like you would your utility, cell phone and insurance bills – it’s something that you pay first and budget for while still saving for your other financial goals. Creating this healthy habit will pay off tenfold down the road.
Erika Kullberg is an attorney, personal finance expert, and founder of Erika.com. She discovered her passion for educating others about personal finance after paying off over $225,000 in student loans in under two years. She is the most followed personal finance expert in the world, with over 21 million followers across TikTok, Instagram, YouTube and Facebook.
The views and opinions expressed in this column are the author's and do not necessarily reflect those of USA TODAY.
veryGood! (56424)
Related
- Nevada Democrats keep legislative control but fall short of veto-proof supermajority
- FTC issuing over $5.6 million in refunds after settlement with security company Ring
- Police officer hiring in US increases in 2023 after years of decline, survey shows
- Ellen DeGeneres breaks silence on talk show's 'devastating' end 2 years ago: Reports
- Mike Tyson has lived a wild life. These 10 big moments have defined his career
- How Drew Seeley Really Feels About Doing Zac Efron's Vocals in OG High School Musical
- The Best Early Way Day 2024 Deals You Can Shop Right Now
- Senators renew scrutiny of border officers' authority to search Americans' phones
- Republican Gabe Evans ousts Democratic US Rep. Yadira Caraveo in Colorado
- Police officer hiring in US increases in 2023 after years of decline, survey shows
Ranking
- Gold is suddenly not so glittery after Trump’s White House victory
- WWE Draft 2024 results: Stars, NXT talent selected on 'Friday Night SmackDown'
- To spur a rural rebound, one Minnesota county is paying college athletes to promote it
- 2024 Kentucky Derby post positions set: Here's where each horse landed
- Monument erected in Tulsa for victims of 1921 Race Massacre
- The 43 Most Popular Amazon Items E! Readers Bought This Month: Trending Fashion, Beauty & More
- MLS schedule April 27: Messi visits Foxborough, New York Red Bulls in another intriguing game
- New York Jets take quarterback on NFL draft's third day: Florida State's Jordan Travis
Recommendation
-
The White Stripes drop lawsuit against Donald Trump over 'Seven Nation Army' use
-
Gaza baby girl saved from dying mother's womb after Israeli airstrike dies just days later
-
Pacers' Tyrese Haliburton hits game-winner in thrilling overtime win over Bucks
-
Senators renew scrutiny of border officers' authority to search Americans' phones
-
Bitcoin has topped $87,000 for a new record high. What to know about crypto’s post-election rally
-
The Best Early Way Day 2024 Deals You Can Shop Right Now
-
Wild onion dinners mark the turn of the season in Indian Country
-
Jury finds Wisconsin man guilty in killing, sexual assault of 20-month-old girl