Slow and steady wins the investment race
As with anything else in life, an early start is key to investment. The earlier you do your retirement planning, the greater will be your return on investment. There are more reasons than one for you to start investing early in your career.
Compounding effect
The most important reason to start investing early is to get the benefit of compounding. Compound interest works magic for any investor. As you know, compound interest means the interest earned on interest. If you continuously reinvest your earnings, your return on investment will increase exponentially.
When you regularly invest from the start of your career, you are increasing the return you receive on your returns. A monthly investment of as low as R1,000 or R2,000 will have a large impact on your financial position. Let’s understand the effect with a few examples:
Example 1: X is 25 years old and has 35 years left for retirement. He starts investing R1,000 per month for 35 years at a return of 12% per annum.
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