When’s the right time to invest?

If one thing’s for sure, it’s that there’s no concrete age at which you should start investing. Your investment decisions should be solely based on your current economic situation and your future goals. As mentioned in a previous article, “How much of my money should I invest?” age has nothing to do with investing, rather, preparation has everything to do with it.

Getting yourself out of debt, having money set aside for emergencies and creating and maintaining a budget are three of the most important steps you should take before you make the decision to invest. In other words, the best time to invest in property or shares is as soon as you financially can. Not only does getting rid of your debt make it easier to use your money to invest, but this action alone will give your money time in the market to grow and take advantage of compound interest. By definition, compound interest is essentially earning interest on top of interest. The more time you give your money to grow, the less risk you are taking on overall and the greater your compound interest will grow. This puts you in the best position to make your money make money.

Additional assistance from a financial advisor or professional can be your next plan of action; someone who can steer you in the right direction and help you invest in ways that lead to financial stability and freedom can be advantageous. Seeking financial advice should always be at top of mind when you’re ready to start investing your money.

There’s no concrete age to start investing.

Does the current economic environment impact investment timing?

If you’re on the fence about investing based on the current economic climate in Australia, don’t worry. The thought of investing during a recession may seem like a ridiculous idea, but investments may actually do better during these strange times, as highlighted by The Australian Financial Review. In fact, a recession or the current state of the market presents opportunities to invest in assets that are lower in value than they were before. Historically, in the years after a recession, markets recover and can provide strong investment returns for people.

Sitting down with a financial advisor can be helpful on your investment journey.

“There are no guarantees, but based on the analysis of previous recessions, this approach holds the best chance of long-term success,” wrote Robin Bowerman, head of market strategy at Vanguard Australia.

The economic downturn at the beginning of the pandemic shocked the world. That’s no surprise. But the growth and success seen over the last few months prove that you shouldn’t let strange times intimidate you out of investing. While you can’t predict the future, history shows that recessions aren’t forever and financial success can still be achieved in the long run.