When it comes to financial planning, a prevalent piece of advice often emphasizes the importance of starting to invest early. Does the early bird truly catch the worm, or could arriving too early be a waste of resources and a bit awkward to navigate?
‘The best time to invest is now!’
At a stage where many may feel overwhelmed by the thought of investing, it could be a pivotal moment in their financial journey. In this piece, we’re diving into the substantial impact of starting your investment journey early, ultimately growing your portfolio and returns. In truth, there is great significance and strategic value in early-stage investment. Here’s why:
1. Embrace a higher risk tolerance in your portfolio
Simply put, investing early gives you much-needed wiggle room regarding your time horizon. It allows you to take a more confident approach concerning your risk tolerance, meaning you can afford to ride out any market fluctuations. Early investors feel more comfortable with market downturns as they have the luxury of a longer time period before having to access their investment funds, allowing them to potentially benefit from higher-risk, higher-reward investments.
2. Because everyone loves compound growth
Many investors prefer early investment because of the time benefit it offers though compounding. Compounded returns means that investors are able to earn a return on your principal contributions as well as the returns they generate. This means that not only do you earn returns on your initial investment, but you also earn returns on those returns, leading to exponential growth over time.
3. Build healthy financial habits
By establishing a strategic plan regarding investment opportunities, investors can consistently build towards their future goals and objectives. This is especially valuable in providing a cushion for setbacks. Ultimately, having investments in place early on can provide a financial cushion to help you navigate through challenging times.
Invest early, but responsibly
In the end, every investment involves some level of risk. Nevertheless, it’s crucial to manage that risk responsibly, keeping in mind the specific goals, context, and risk tolerance of each individual client. To do this, financial advisers need to be tapped into real-time data, client segmentation, insights and analytics to ensure that they always keep the client’s best interest in mind, for the now and for their future financial situation.
That’s where we come in.
Insightful and powerful, yet easy to understand analytics
Investments often require in-depth analysis, time and resources to ensure that you and your client are aligned moving forward. To do this, you can’t be caught up in manual administrative tasks like commission management, draining your time (and patience).
At Commspace, not only do we take the burden of revenue management off your shoulders, but we replace it with one centralized solution for all your management, tracking and reporting needs.
