4 Benefits of Early Investment Planning

March 24, 2017

We all aspire to become wealthy but shy away from the rudiment of financial investments. Investing is the process of growing the portfolio of your future and also, nurturing your assets until retirement.

Top notch investors started very early by investing in qualified startups, a fast growing brand name with a good stock growth. And today they get a fantastic return on Investments (ROI) even in this down economy.

No one has ever been too young to manage great portfolios. The old saying "the early bird gets the worm" certainly applies to investing early.

Richard Branson started investing at the age 16 when he dropped out of school. A decision that ultimately leads to his first company Virgin Records.

Warren Buffett invested in Apple stock about a year ago, in early 2016. Doubled his holdings in Apple which make him one of the tech company's ten largest shareholders, owning more than 1% of Apple.

Early investments attract some quality benefits which are:

1. Time:

Other things can wait, but time will never. Also, the time value of money (TVM) is an important element to investors because a naira on hand today is worth more than a naira promised in future; the naira on hand today can be used to invest and earn interest or capital gains.

2. Quality Return on Investment (ROI):

ROI measures the amount of return on an investment relative to the investment's cost. Your investment returns can easily be utilized for a quality effort. To calculate ROI, the return of an investment is divided by the cost of the investment, and the result will be generated in a percentage or a ratio.

ROI formula:
ROI

For example, Bola invested N1 000,000 in 2015 and sold his shares for a total of N1 200,000 a year later. To calculate the return on his investment, he would divide his profits (#1 200,000 - #1 000, 000) by the investment cost (#1 000, 000), for a ROI of #200,000/#1,000,000, or 20%.

3. Spending scrutinization:

The best way to have a better investment is to take a close look at the state of your finances. By examining how much money you earn and where you spend it. Wealth accumulates through restrained spending. When you save, and then invest your savings, you are creating a better financial future for yourself and kids.

4. Ahead of financial objectives:

Early investment gives you the opportunity to check if all your investments match with your goals so that you can rebalance your investment early in order to achieve the set financial objectives. Learning to be a disciplined investor in your early period will help you achieve your long-term financial goal.

This benefits enumerated above shouldn't be overlooked, but also note that saving money to invest at a young age isn't easy, but you simply can't afford to wait to invest when it is convenient. Having a little money shouldn't stop you from investing, simply start small investments and give them time to mature. Investing early is one of the best decisions one can ever make