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Invest now instead of waiting - every euro not invested actually costs you 22 euros!
Many individuals tend to put off investing, but probably not now that they know the actual costs of waiting to invest. The best time to invest is now. This is not only due to the always positive expected value on the stock market, but also because the compound interest effect becomes stronger the longer you leave the money in the market. Nevertheless, many people put off investing or just leave it alone. What they don't know is that every euro not invested causes enormous costs. Investors consider the opportunity costs of...
Invest now instead of waiting - every euro not invested actually costs you 22 euros!
The best time to invest is now. This is not only due to the always positive expected value on the stock market, but also because the compound interest effect becomes stronger the longer you leave the money in the market.
Nevertheless, many people put off investing or just leave it alone. What they don't know is that every euro not invested causes enormous costs.
Investors do not consider the opportunity cost when investing
When investing, many investors do not consider the opportunity costs of starting investing too late or not at all. Basically, this means that you could have more money if, for example, you had started earlier or invested one euro more.
What sounds like a pipe dream at first glance is actually a very good way to see what your own money can do or not do if you don't let it. In addition to the motivating factor of saving more money, this also leads to a more conscious use of one's own money.
But how high are the opportunity costs actually for people who put off investing or put too little aside?
That's why every euro you don't invest actually costs you 22 euros
It is worth taking a look at the following calculation. In this example we calculate that for every single euro there is a return of seven percent p.a. a. (MSCI World average return since 1970). We take a look at investing at the age of 20, 30, etc. until retirement at 65. The bottom line is that the values given out are the opportunity costs if you don't invest the one more euro:
20 years: 22.71 euros (of which profit: 21.71 euros)
30 years: 11.35 euros (of which profit: 10.35 euros)
40 years: 5.67 euros (of which profit: 4.67 euros)
50 years: 2.83 euros (of which profit: 1.83 euros)
60 years: 1.41 euros (of which profit: 0.41 euros)
So it turns out that if you invest early, you'll earn a lot of money on the stock market, but if you put off saving, you'll miss out on a lot. So that you are not one of those who have to miss out on returns, it is worth having monthly savings plans and household budgets to better control your own money.
Read about it:
How saving just 20 euros can make you a millionaire
Or:
Interest rate ETF: At least 10 percent profit and interest with these bonds
According to a report by www.boerse-online.de, many private individuals tend to put off investing or just leave it alone. It is important to know that every euro not invested causes high opportunity costs. These costs of starting investing too late or not at all can be enormous, causing you to miss out on potential profits.
According to a calculation in the article, the opportunity cost for every euro not invested is an annual return of seven percent. For example, if you invest at the age of 20, the opportunity cost is 22.71 euros, of which 21.71 euros is profit. At 30 years old it is 11.35 euros (of which 10.35 euros is a profit), at 40 years old it is 5.67 euros (of which 4.67 euros is a profit), at 50 years old it is 2.83 euros (of which 1.83 euros is a profit) and at 60 years old it is 1.41 euros (of which 0.41 euros is a profit).
These numbers make it clear that investing early can lead to significant gains in the stock market, while postponing saving means large financial losses. In order not to miss out on returns, it is recommended to use monthly savings plans and household budgets to better control and invest your own money.
Read the source article at www.boerse-online.de