If I were to ask you, “what’s your next life goal?”, what would your answer be? Pursuing your post-grad degree in your dream college? Or your desire to buy that luxury handbag? Well, no matter what your next life goal is, investments may assist you to meet all those goals!
Not just that, timely investments prepare employees for both short-term and long-term goals- be it setting up a rainy day fund or buying the car of their dreams.
To save your precious time, this article will dive deep into how timely investments can help you reach your next life goal.
Why is investing important?
Let’s face it- we all have that one bucket list with all of our life goals listed down on it.
This begs the question, how do you meet those goals? Well, the answer is simple: through investments!
Investments not only generate a second source of revenue but may also assist you in curating inflation-beating returns. Aside from that, making regular investments instills a habit of saving money regularly, which helps you develop financial discipline over time.
Now, if you are a student or someone who has just started earning, you may ask yourself, “Should I start investing this early?” And the answer is a big-time yes! Investments are essential for us. Be it funding your higher education or gearing up for office work life, investment is the shield that protects you from all those financial troubles and puts you at ease.
1. Prepare your rainy day fund
Are you too guilty of taking a rain check on your rainy-day fund? Here’s your reminder!
For all the times when there’s an unforeseen expense to be made, rainy days come to your rescue and push all your stress away.
Setting aside regular chunks of money every month assists you to build your rainy day fund effortlessly! To help you get there with ease, follow the 80:20 rule for allocating your monthly savings.
This not only helps you to get rid of that sudden moment of panic but also inculcates financial discipline.
2. Get ready for your retirement
Are you worried about your retirement plan too? Well, a lot needs to be done to ensure that you sustain the same level of financial stability as you enjoy today.
The longer you invest before you retire, the more time your money has to grow.
When saving for retirement, keep in mind that you’re up against inflation. Inflation affects your purchasing power directly and may ruin your finances. As a result, if you do not invest in a way that outpaces inflation, your money will lose value in the future.
3. Firm up your financial discipline
Ever heard that you have to be rich before investing? Don’t fall for it, it’s a myth that you have to be rich to start investing. In fact, the earlier you start investing, the sooner you achieve financial discipline and get a step closer to attaining financial stability. “The sooner, the better” is our go-to piece of advice here.
So, how do you do it? It all begins with baby steps. Begin by saving every month! When you start investing a certain amount of your paycheck every month, you eventually turn it into a habit that serves you in the longer run.
Be it budgeting, savings, or timely investments, financial discipline is the anchor you require to sail through all of your financial goals.
4. Turn your short-term financial goals into reality
Imagine walking past a store, looking at a gorgeous dress, and saying to yourself, “I’ll buy it when I’ve saved enough money.” Well, timely investments help you fund such short-term financial goals easily.
The idea is to bifurcate your goals into short-term and long-term goals first. Why, you ask?
Because if you don’t have a specific goal in mind, the money that should be going into that investment will almost certainly be diverted to other priorities that may arise on a day-to-day basis.
5. Take advantage of compounding
An investment is to your goal what a seed is to a tree! With the right amount of patience, you walk towards your goal slowly and steadily. And that’s where compounding comes into play.
But what is compounding? Earning returns from existing returns is referred to as compounding.
Your assets will grow at a faster rate over time due to compounding than if you invest later. As a result, the earlier you start investing, the better your chances of making a profit.
No matter what financial stage you are in, investments are blessings in disguise to help you reach your goals.
The earlier you start investing, the sooner you will find your roadway to financial stability. And if you are a newbie investor wondering how to go about investing, check out this link to empower your financial decision while making investments.
This article is brought to you by Standard Chartered Bank (Singapore) Limited. All information provided is for informational purposes only.