Maximising your potential returns: The power of starting to invest early

Starting to invest early can be a powerful way to set yourself up for a secure financial future.

Not only can it potentially lead to larger returns over the long term, but it can also give you the opportunity to take advantage of compound growth, riding out market movements, the ability to take on more risk and take advantage of investment loans for the potential for greater personal objectives and growth over time.

Additionally, starting to invest early can help you reach your financial goals more quickly and provide peace of mind knowing that you are actively working towards a stronger financial future.

In this article we explain a number of benefits you can realise by starting to invest early and why it is never too soon to start planning an investment strategy for your financial future.

Ready for your next move?  Apply for an investment loan to secure your next asset.

The Power of Compound Growth In Long Term Investing

Compound growth refers to the process of earning returns on both your original investment in and on the accumulated returns from previous periods. This means that the longer you hold an investment, the more it can potentially grow through compound growth.

The principle of compound growth can be applied to investment property, both residential and commercial property, as well as other asset classes. 

The power of the compound growth property market lies in its ability to generate returns on both your original investment and on the accumulated returns from previous periods. By starting to invest early and holding a property for the long term, you can realise larger potential returns through compound growth.

Investing Early Allows You to Take On More Risk

Starting to invest early allows you to take on more risk, which can potentially lead to higher returns over the long term. This is because you have a longer time horizon to ride out any short-term market fluctuations and realise the higher potential returns that come with taking on more risk.

Let’s say you start early investing at age 25 and plan to retire at age 65. This gives you a 40-year time horizon to invest your money. During this time, it is likely that you will experience both ups and downs in the market. However, because you have a long term vision, you have the opportunity to ride out market fluctuations and potentially reap the rewards of higher returns that come with taking on more risk.

On the other hand, if you start investing later in life, you may have a shorter time horizon to invest your money and may not be able to afford to take on as much risk. This could potentially limit long term investing and your potential returns.

Overall, starting to invest early allows you to take advantage of the potential for higher returns through long-term investing and the ability to take on more risk.

Investing Early Allows You To Ride Out Market Fluctuations

Having a long-term investment strategy in place can help you stay disciplined and avoid making impulsive decisions based on short-term market fluctuations. This is especially important when starting to invest early, as you will experience a number of ups and downs in markets over the course of your investing journey.

A long-term investment strategy can include setting financial goals, determining your risk tolerance, and selecting the appropriate mix of investments to help you reach your goals. It can also involve regularly reviewing and adjusting your investment portfolio to ensure it is aligned with your goals and risk tolerance.

By having a long-term investment strategy in place, you can stay focused on your goals and avoid being swayed by short-term market movements. This can help you stay disciplined and potentially maximise your potential returns over the long term.

How to Leverage Your Investment Growth With Investment Loans

Using an investment loan, also known as leveraging, can be a way to increase your returns on an investment by borrowing money to increase your purchasing power.

Investment loans enable you to acquire more assets than you could otherwise afford relying on just your own capital financial situation.

Additionally, a credit strategy to increase growth could be to use the equity in existing assets to fund the purchase of future investments without having to save large amounts for deposits or dip into capital you’d like to use elsewhere.

It is important to keep in mind that investment loans, like all loans, can come with potential risks.  It’s important to understand these risks before going ahead and understanding if an investment loan is the right strategy for you.

 Talk to a specialist to see if you can use the equity in your assets to qualify for an investment loan.

Final Thoughts

Overall, the earlier you start investing, the more time your investments have to grow and potentially increase in value.

By starting early and having a long-term investment strategy in place, you can take advantage of the potential for higher returns, smooth out the ups and downs of the financial markets, utilise investment loans to create the potential for large growth and potentially reach your financial goals and personal objectives more quickly. So don’t wait any longer – start investing today and set yourself up for a brighter financial future.

Disclaimer: This article is opinion only and not financial advice.  It should not be relied upon as an investment strategy.  You should always seek appropriate financial advice specific to your situation and regularly review before making any decisions.