Age matters while investing.
as soon as you put Your money will work for you, the longer you are taking advantage Compound Interest. Those who start investing at the age of 20 years, they get more profit as compared to those who start investing at the age of 40 years.
Although, age is not the deciding factor When choosing an investment method.
“The most important thing when deciding how to invest is not age,” he tells WebMD. business Insider Taylor Sohns, ETF manager. “What should dictate this is your time horizon.”
your time horizon When do you expect your money market to grow before extracting it for a specific purpose. For example, if you want to save to buy a house, your time horizon could be 3 to 5 years. If you’re preparing for retirement, your time horizon will depend on your expected retirement age.
while choosing Where to invest your money, your specific goals —and when you really need the money to reach them— are more important than your age,
You may have 20 years, plenty of time on your side, and a higher risk-taking ability when it comes to your retirement money, but if you’re saving for a purchase in the short or medium term, If you do, you don’t have as much time for your money to dry up, to recover if the market falls.
“You may be 25, but if you’re going to buy something, like a house, in 5 years, it’s how you invest, not your age,” Sones insisted.
If that’s the case for you, you may want to invest your down payment money in something more conservative that’s less likely to fluctuate wildly.
whereas if you are about to retire or have Retired, Doesn’t Mean You Have To Be Too Conservative when it comes to investing your money.
“If you’re 75 and you have $100 million, you can be as aggressive as you want, because it’s very likely that money will go to your heirs,” Sones explains. “That money doesn’t have to be ultra-conservative, as it should be for a 75-year-old who has to rely on his investments.”
the most important thing is Age is only one factor while deciding how to invest, Instead of determining what type of investment to buy based on your age, spend time thinking about your financial goals and when you want to achieve them.
Once you have a specific goal in mind, you can start thinking about the smartest way to invest to achieve it.
,Goals are at the top of the funnel that determine what you’re trying to do. “With your overall investment,” Sohns says.
When it’s time to put your money to work, make time for it Research different investment vehicles And “Invest in what you know,” they recommend. as a general rule, “If you can’t explain something, you can’t buy it”,