- Investing: Start small, but start now!
- $2,000 can turn into almost $100,000 after 40 years (at 10% return a year).
- Investing in stocks can help you pay for your biggest financial goals.
That 10% average increase may not sound like much, but given time, this interest compounds to produce incredible returns. To achieve financial goals at an early stage, you must start early.
Imagine someone told you that you could turn $2,000 into $100,000 with no work whatsoever. It sounds too good to be true, but it’s completely possible if you understand compound interest. We will cover compound interest in the next topic.
The key element to remember here is time. The longer you have your money invested, the more powerful compounding becomes. That means the younger you get started, and the more patient you are, the greater returns you will reap in the future.
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However, you don’t need $2,000 to get started. You can start small and keep adding to your investment over time. You’ll be amazed at how quickly your investment can grow. In fact, if you added $100 a month to that initial $2,000 investment, after 40 years you’d have close to $1 million.
You’ll have both winners and losers, but if you learn how to identify good companies, you’ll have some stocks that multiply 10 times (or more) in value over the years.
The biggest advantage you can give yourself is to start early and let that compounding work its magic.