The truth, though, is that now is always the right time to start investing. No matter what is happening in the markets and the world around you, the fact of the matter is that investing is one of the best ways to build wealth over time.
Before you get too hung up on waiting for the “right” time to invest, here are 4 reasons why now is the best time:
1. Compound Interest Has Longer to Work on Your Behalf
One of the reasons investing is so great is due to the fact that you earn compound interest over time. The longer you have to earn, the more money you are likely to accumulate. If you wait another three or five or 10 years to start investing, you will lose out on all the potential gains you would have gained during that time.
You might be surprised at the difference five years can make. The sooner you start investing (like right now), the greater your potential returns over time.
2. You Have More Time to Recover From Mistakes
Starting now, while you're relatively young (at least compared to what you'll be in a couple of decades), gives you time to recover from mistakes.
We all do stupid things with our investment portfolios at some point. Whether it's choosing a losing stock or getting into something we don't really understand, mistakes are a part of the investing life.
The sooner you start investing, the more time you'll have to recover from your mistakes, and that can be a big deal later.
3. You Can More Easily Recover From Volatile Markets
Another worry many people have is market volatility. To some extent, I can understand the reluctance to start investing right now — especially when it comes to stocks.
The market is fairly high, and what happens if it loses in the next couple of years? However, even more people are afraid of investing when the market is low, which doesn't make much sense since that is the time to find the best bargains.
At any rate, when you start investing sooner — rather than later — you have the chance to recover from poor markets. Even during the last stock market drop, many people who had invested decades earlier still ended up selling at a profit. And, if they had waited through the down cycle, they would have had even more money by selling now.
When you start investing now, time is on your side, and you have more time to recover from the markets.
4. It's Easy and Inexpensive to Invest
Investing has never been easier or less expensive than it is right now. Nearly anyone can be an investor, thanks to online discount brokerages. With $25 and an idea of which index ETF you want to invest in (for $4.95 a trade and a really low expense ratio), it's possible to get started.
Never has investing been so available to so many people. If you've been on the fence about investing — and remember that you don't have to stick with individual stocks — now is the time to hop off. Start investing now, and you'll see plenty of benefits later.
Don't put off investing any longer — get started now!