Investment is no longer a medium for generating profits but also as a financial plan to prepare for the future. Investment has many benefits and positive impacts if done in the right way.
However, many people are still reluctant to invest for various reasons, one of which is because they are afraid of facing losses. Even though there are many investment instruments that have low risk, for example Fixed Income Mutual Funds.
If not now, when else will you start investing? The earlier you invest, the better it will be for your personal financial condition. Here are some advantages of investing early that you should understand.
Benefits of Starting Investing Early
Everyone certainly wants a bright future, but not everyone can make it happen. Because careful planning is needed, especially in terms of money management.
Investment is one of the right moves to make this happen. Quoted from Antaranews, here are the advantages of starting investing early that you may not know:
- Opportunity to Gain Bigger Profits
By investing early, you have more opportunities to gain profits. It can be said that the longer your investment, the greater the potential profit value.
This is because the value of money invested today will continue to grow. Provided that these investment assets have good long-term prospects. Different investment assets do not have the same opportunity for profit, so you have to be smart in choosing it.
- Opportunity to Gain Compounding Interest
The opportunity to earn compounding interest is one of the reasons why you should invest from now on. What is compounding interest? That is the profit obtained from the combination of investment interest plus investment principal in the previous month or period.
Through these benefits, you can earn additional income without running a side business. The value of the profits can be higher if done in the long term.
- Can Tolerate Risk Well
Fear of facing risks is the main obstacle that potential investors often experience. In any case, there are bound to be risks involved. As with investment, risk is also an important thing that must be faced.
If you don't have enough experience in the world of investment, you should choose a low-risk instrument. For example, Money Market Mutual Funds and Fixed Income Mutual Funds. That way, you can learn to face risks starting from the lowest level.
- Prepare for a More Established Future
Having an established future is everyone's dream. To make this happen, action is needed as early as possible, namely by investing consistently. Through investment, you can realize your future financial plans optimally.
For example, buying a house, buying a new car, preparing for children's education costs, developing a business, and other things. Investment can also help prepare retirement funds on time or even faster to achieve financial freedom at an early age.
- Increase Investment Experience
The advantage of investing early is not only based on profits but also on the experience gained. The earlier the investment is made, the more experience you will have.
Experience is a valuable thing that can be used as learning and as a reference in determining investment steps. When someone has a lot of experience, the investment decisions made will be more accurate and precise than novice investors.
Of all the benefits, which part do you think is the most interesting? Because you already know the benefits, there is no reason not to start now.
Investment Mistakes to Avoid
Making mistakes when investing is normal, especially for new investors. Even experienced investors have experienced this, so don't be afraid of making mistakes when starting out.
However, this does not mean that you should make impulsive decisions when investing. Ideally, first determine the goal to be more organized. To avoid the risk of loss, you should avoid the following things.
- Choosing the Wrong Investment
This mistake is often experienced by new investors who are not very familiar with investment instruments. The way to choose the right investment is to understand the types of instruments. Learn all the details starting from legality, profit opportunities, work systems, to the level of risk.
Fixed Income Mutual Fund is the right choice for those of you who are just starting to invest. The profit value is fixed and is classified as a low-risk instrument.
- Making Impulsive Decisions
Impulsive investment decisions usually lead to less than optimal results. They can even affect financial stability due to losses.
To avoid this problem, you need to make careful considerations. If necessary, carry out an in-depth analysis before making investment decisions. This is very important because most new investors only focus on thinking about profits without looking at the other side.
- Putting Reality Aside
The value of the profit you gain will be directly proportional to the level of risk. That means, the greater the profit, the higher the potential loss. If you don't want to fall into a trap, don't close your eyes to the risks because you are tempted by the promise of big profits.
Choose investments according to your risk profile so that you are prepared to face potential losses. Conservative investors should choose Fixed Income Mutual Funds and Money Market Mutual Funds because the risk level is quite low and safe.
- Ignoring the Importance of Diversification
Not diversifying is also one of the mistakes investors often make. Spreading funds across several investment instruments will help reduce the risk of big losses.
That is why investors are advised to allocate their funds to several different instruments. When you deposit all your money into one instrument, you will suffer big losses if that instrument has problems.
Of these mistakes, have you ever experienced or are currently experiencing them? It's best to avoid these things to avoid fatal investment risks.
Start Investing Early through Trusted Partners
Investing early has low risk if done in the right way. Don't be afraid to face risks when starting to invest and make it a challenge. DBS Treasures can be the right choice for those of you who need a trusted professional investment partner.
There are many choices of the best Fixed Income Mutual Funds managed by experienced Investment Managers to make it easier for you to diversify your investments. Find the convenience of investing in various assets through the digibank by DBS Application.
You can apply for a Single Investor Identification (SID) easily just via a gadget. Through this application, customers can also carry out Mutual Fund buying and selling transactions and switch investments practically.
Be supported by curated market analysis from a team of financial experts who will communicate it. Get the latest opportunities that have been tailored to your risk profile and portfolio needs, driven by Artificial Intelligence/Machine Learning (AI-ML). This insight is equipped with curated solutions related to investment (Grow) and insurance (Protect), so you can quickly and confidently invest through your preferred media.
Start investing in Fixed Income Mutual Funds by joining as a priority banking Client now. Gain full support in determining the right and accurate investment steps with DBS Treasures. Want to know more information about Mutual Fund investment? Click here for details.
