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Investing your money is very important and not reserved for the rich.

Investing also does not require you to day trade, do hours of research on companies, or thousands of dollars.

You can start investing with just $5 and a little bit of education.

Here are a few reasons why you should start investing ASAP:

Time

The first and MOST important reason is that time is on your side. Today is better than tomorrow and 30 is definitely better than 60.

Why? Compounding interest.

When you invest your money, that money grows. Of course there will be times that the market crashes, but the average total return of the S&P 500 over the last 90 years is 9.8%. The money you invest gains interest and then that interest ALSO gains interest.

The sooner you invest that money, the longer it can grow (considering you keep it invested).

Here’s an example of investing from 30-60 vs 50-60:

If a 30 year old starts at $0 and invests $1,000 a month for 30 years at a modest 7% return, they will end up with $1.2 million.

If a 50 year old starts at $0 and invests $3,000 (3x the amount) a month for 10 years at a return of 7%, they will end up with $518K.

$500,000 is still pretty good, but that’s with investing $3,000 a month!! That’s pretty high.

Obviously, this is just an example and many things can impact the outcome, but the sooner you start the more time you give your money to compound.

Create a promising financial future

Retirement may seem far away, but it’s not something that should be neglected.

I believe many people still believe investing is something you do when you get “older.” But when exactly is older?

The longer and more you invest now, the more you will secure your future.

If you want to create a future with less stress, then investing long-term is the key.

You don’t want to procrastinate on investing and then you’re 60 with nothing saved. Instead, you could invest regularly over several years and end up with millions to live off of.

Free money (if available)

If your employer offers a company match for your retirement plan, that is free money.

Not everyone has this available to them (including myself right now) but it can make a huge difference!

Let’s say your income is $60K and your employer matches 100% of up to 6% of your contributions. This means you contribute $3,600 per year AND SO DO THEY.

Your money will grow much faster this way.

Of course, always read and understand all of the details involved, including the vesting period.

If your company does offer a match, I suggest you begin investing here first.

It’s easy to start and doesn’t require tons of money

Investing seems complicated, but once you start it’s not so bad.

As I said above, if your company offers a match, start there.

Invest at least up to the company match to take advantage of the free money (considering all things).

Otherwise, you can invest in an IRA (Roth or Traditional), with a brokerage account, and/or in individual stocks.

Determine which platform you would like to use (VanGuard, Fidelity, TD Ameritrade, RobinHood, etc.) and search videos on how to set up your account (depending on what you want to invest in).

Transfer your money over and go!

Depending on how and what you choose to invest in, you can start with just a few bucks. However, some investments do require a minimum of a few thousand dollars.

Continue to learn about investing and continue to increase your investment rate.

You can’t really mess things up

In saying this, I would suggest avoiding investments in individual stocks.

Picking and choosing stocks and trying to time the market are how you lose money.

Instead, if you invest long-term in well known index funds, mutual funds, REITs, etc. you should be OK.

For example, investing in the S&P 500 is a wise, responsible start. Investing in the total stock market is also good.

Again, educate yourself a little bit and everything will start to make sense.

You don’t want to look back and regret not investing sooner.

Stop putting it off and get started!