Where to invest money? Well, the answer is very simple. The sooner you start investing money, the more time you allow your investment to grow. Early investment means that you are allowing your money to get compounded and multiply. Compounding interest adds to your income by accumulating your earnings and dividends.
Share market is a world of unpredictability. Here are 3 basic and golden rules for all investors:
- Invest early,
- Invest regularly, and
- Invest for long term.
Many people just wait for the "right time" or "best time" to invest. What they don't understand is that the risk of waiting can be more than potential rewards of early investment. Compounding is a very powerful tool to grow money.
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| When to Invest? |
What is Compounding?
Compounding is growth by reinvestment of returns earned on savings. By means of compounding, you not only earn income on the original investment but also on the reinvestment of dividend / interest accumulated from your original investment over the years. The power of compounding is one good reason to start early investment. The earlier you start investing, the more money you will make. The longer you leave your money invested at higher the interest rates, the faster your money will grow.
If you plan to invest in share market, then invest in stocks with a long-term prospective. The general upward momentum of the economy mitigates the stock market volatility and the risk of losses.
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