Tips to grow your Money while you're Young
Graduating from college and moving to the next stage of adult life i.e. economic productivity is really exciting. Young individuals can enjoy the greatest freedom as they are employed and have very few responsibilities to look after.
Most young people find it very hard to save money with a small and limited source of income. Expenses make their way on autopilot mode providing almost negligible scope for savings and investments.
If you’re still young and planning to lay a foundation for the kind of lifestyle you wish to have in the future, the path is closer than you expect it to be. The best part is that the younger you are, the better is the opportunity.
Financial planning in Dubai helps young investors to develop healthy financial habits that last throughout their life. Investments made during early phases of economic productivity help individuals to build a significant corpus for their retirement. Although savings, investment and financial planning in Dubai might sound boring, starting early and young is probably the best way to give a kick start to your investment portfolio.
Financial planning in Dubai requires dedication, consistency and rigorous efforts which increase gradually with positive results over time. Remember you are never too young to start saving and investing. This quick read will help you to grow your money while you are still young.
Time is one of the most crucial factors when it comes to accumulating wealth. Investors who start early are more likely to reach their financial goals and manage to build a sizeable corpus. To understand this let’s consider a hypothetical situation.
An early investor decides to open up a retirement account on his/ her 18th birthday, if he/she invests AED 300 every month till the age of 60 he/she will manage an 8% return by that time and would have almost had AED 1 million in their bank account.
Now if the same investor starts on his/her 30th birthday by the time he/she turns 60, he/she will manage to accumulate only AED 440,445 in their bank account because they missed the first 12 years.
The hypothetical situation mentioned above explains the importance of starting early and the power of compound interest. Albert Einstein once mockingly referred compound interest as the eighth wonder of the world.
Plan Your Expenses
Financial planning in Dubai allows young investors to identify the scope of saving by planning their expenditure wisely during the early years of their economic productivity. Investors should understand their income and plan their expenses accordingly which will help them to save and allocate a small portion of their income as an investment. While planning your expenses it is highly recommended to consider unexpected miscellaneous expenses which will ensure that you stick to your budget.
Add to your Savings regularly
Regular contributions impact your financial growth and help investors to accomplish their goals at an accelerated pace. Adding small amounts regularly to your savings ensures that you aren’t tempted to spend the amount you intended to save.
Make Use of the Power of Compounding
Once your savings grow to a sizeable amount it is always a wise decision to move your funds into an investment scheme. Transferring funds from savings to investment tools comes under financial planning in Dubai. Moreover, opting for investment plans allows investors to take advantage of compounding.
Compounding grows investments with a much faster pace and works even faster if you invest more frequently. Compounding is beneficial for early investors as it helps them to earn interest over interest which contributes to their corpus.
Understand that Money is a Tool
Most of the young investors consider money as a solution to all their problems. Financial advisors often refer to money as a tool that helps you to grow over time. When investors consider money as a tool that can be used to create a lifestyle you desire via correct financial planning in Dubai.
If you want to spend the life you desire financial planning in Dubai is the key. Your choices and decisions today will determine your lifestyle tomorrow.
Investing during your early years is the best decision you can make as an investor to safeguard your future. Starting small and slow at a young age and making consistent contributions ensures that you can live your life peacefully with financial security.
Financial planning in Dubai, especially for young investors, is often overlooked which makes it our responsibility to become financially independent and secure.