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Need more reasons to start saving early?

This article stresses the importance of starting to save early in your life, and tells you why it is not so difficult.

The article “Start saving early and gain from Compounding – Early bird gets the worm” explains the power of compounding, and explains why it makes tremendous sense to start saving as early as possible.

But if you are still not convinced, here are some more reasons:

 

High margin of error – High tolerance for Risk

When you are young, you have a margin for safety. Even if some of your investments don’t perform very well, you have the time to recoup the loss.

This means that you can invest in avenues that have comparatively higher risk, but at the same time, have a very high return potential too. Some examples – Equities, sector specific mutual funds, mid cap mutual funds and real estate. All these investments carry high risk, but can pay off really well in the long run.

Thus, when you are aiming for a target that is far away, and you have time on your side, you can invest in potentially highly rewarding (but risky) avenues. Thus, you can reap rich benefits if you invest early.

 

More disposable income when young

We discussed this earlier in “Settle early in life – buy a home when young“, but let me repeat it here too.

When you are young, your living expenses are usually low. You don’t have to worry about paying college fees for your kids, or about your son’s wedding…

And if you are single, of course your expenses are much lower compared to your income… (They should be, at least!!)

The bottom line – when you are young, your expenses are limited, and therefore, you have a higher disposable income than you would have in your middle age. So, save more!

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