Saving and investing are the most important aspects of personal finance. These two should ideally begin as soon as you start earning an income. However, despite this, it is common to see many working individuals delaying the process of investing or doing inadequate investment during the first decade of their career. This is not the right approach as an early beginning would have given them more time to grow their wealth. When you enter your 30s or you are in your mid-30s, you are probably married, have a family to support, and must have career-related responsibilities too. So if you are in your mid-30s and haven’t begun investment till now, here is why you should turn serious about your investments.
You Are Already Late And Need To Compensate
Since you are late by nearly a decade or more, you are at a loss as you deprived yourself the power of compounding which long-term investing provides. The wealth that you could have created in the first 10 years would have grown at a much quicker rate in the next 10 years. That time is lost. But it is still not late. There is no need to panic or get disproportionately stressed. What you need to do is streamline your expenses; if need be, cut your spending and shift more funds towards investments. If possible, try to compensate for the notional loss you had already witnessed by investing more going forward. Of course, the notional loss of the past years can’t be compensated immediately in a matter of a year or two. But certainly, you can cover it to a large extent by being disciplined and regular with your investments for the rest of your working life.
Financial Goals Are Many But Time Is Little
So far you must have experienced various ups and downs in life. These cycles may have made you more mature and practical. Amid this, it is no surprise if you find yourself in a situation where you start thinking about your financial goals, which could be many. It may be buying a house, children’s education, marriage, owning a vehicle or something else. However, it is equally true that time is not on your side and you should acknowledge this fact. Time is passing fast. You are hardly left with 25 more years of working life. If utilised well by taking investment decisions seriously, you can still attain financial prosperity.
You Are No More Alone, You Have A Family To Look After
By now, the days are gone when you were single. You may have a family – wife and children – to look after. Remember, time flies. Soon your children will be ready for higher education. Are you ready to meet the higher education costs which are continuously rising? There could be times when you or your family are hit by medical emergencies. Are you ready to tackle such situations? If your answer is ‘no’, you must turn serious now. Any more delay will only add to your distress, if any. You need to financially equip yourself strongly to battle against life’s uncertainties and meet the rising expenses.
Late For Retirement planning
Among several financial goals, retirement planning is one of the critical ones. However, it is one of the least understood and is given either no or less importance during initial part of the career. When an individual gets into his/her mid-30s, he develops a certain degree of understanding about why retirement planning is necessary. But, yet again, time is limited and you need to act fast and strategise your investment for post-retirement life. Since, you will not have a regular monthly salary then, but your expenses will only rise – it’s time for you to pull up your socks and do financial planning for your Golden Nest Egg.
Besides, the above mentioned investment reasons, you should also give due importance to insurance in your mid-30s. Insurance has to be an important part of your financial planning. Ideally, you should have a term insurance and a medical insurance to help you and your family sail through smoothly in your tough times. If you have none of the two, it’s high time you should go for. Remember, delay in buying an insurance policy tends to inflate your premiums. If you had bought insurance schemes early in your career, your premium amount would have been substantially lower. Before premium amount becomes unaffordable, it’s better to get one as you can’t afford to be late any more. It’s wise to stay insured and secured rather than lead a precarious life putting you and your family at risks all the time.
The writer is CEO, BankBazaar.