Investing from an Early Age
An investor’s age also influences the amount of risk they can withstand. Young people, with years of earnings and potential growth in the near future, can afford to take on more risk in their investment activities. However, individuals reaching retirement years may gravitate towards low-risk or risk-free investments, such as bonds or mutual funds. Therefore, young adults have the ability to build more aggressive portfolios that are subject to increased volatility and potentially larger gains.
According to US News, the power of investing is to turn seemingly insignificant amounts into massive sums of money. Take, for instance, a daily $5 latte from Starbucks or any coffee shop. If you were to skip the latte and rather invest that $5 a day into the stock market, your coffee fund could grow to approximately $11,000 in 5 years. Keep investing $5 a day for 50 years, and you could have more than $800,000 - just by making coffee at home. Through such examples, it is clear how applying the concept of investing from an early age can exponentially compound your funds within a matter of years.
For additional information, purchase the book titled Investing for Kids by Dylin Redling linked below.