The earlier you start saving, the more time works in your favour, thanks to compound interest. Compound interest is when a principle layer of interest starts to accumulate its own interest. And the earlier you start, the more this affects your bottom line.
Let’s say you want to get USD 1 million by age 65. Assuming a 6% return rate, if you start saving at 30, you only need to put aside about USD 698 per month. Start the process just 10 years later at the age of 40 and you will need to put aside more than double that: over USD1,435 a month. That’s a huge difference. By starting just 10 years later you will have to find an extra USD 221,000 i.
Start by thinking about your financial goals: what do you want to achieve? When do you want to achieve it? You may need to renovate your house in five years, or you may want to buy your first car in 12 months. Once you have established the size and timeline of your goals, you then have something clear to work towards. For goals that are small amounts you will be able to save up to reach them. For larger amounts, and if you have a longer time line, investing will help you hit your target. This is a good time to look at the savings or investment options available to you and decide which best suits your needs.
Go digital, and your wallet will thank you for it. Our research has shown that 65% of the emerging affluent feel that their familiarity with digital tools has been vital to their personal success. Digital technology makes financial products more visible and accessible, allowing users to make more informed decisions quickly and easily.
Want to start your investment journey? Talk to our financial experts at Standard Chartered today.
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Source – https://av.sc.com/corp-en/content/docs/SC-Emerging-Affluent-Study-2018-Climbing-the-Prosperity-Ladder.pdf