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Invest Early: Make Time Your Best Friend
As we go through different life stages, our financial needs will evolve. Hence, it goes without saying that planning ahead for each stage, in addition to starting to invest early in life, can help ensure a smooth ride up to our retirement years.
Learning to invest early and following a realistic financial plan are essential for success in investment. Here is a general guide on how we can make time work for us to reach our long-term financial goals.
In the 20s and 30s
For those of us in our 20s, this is the perfect time to start saving and putting our money to work. As there is still a relatively long way to go before retirement, we should develop good saving and spending habits so that we can invest and accumulate wealth.
The good thing about starting to budget and invest early is that we have more time on our side. This is also the best time to take advantage of the power of compounding returns to build a larger retirement nest egg.
First, start by identifying and writing down your medium- to long-term goals. Next, work out a budget which shows how much of your income is taken up by monthly expenditures. It is also important to set aside at least three months’ income for emergencies.
While it is not practical to be debt-free, we should be careful with debts which have high rates of interest such as credit cards. It is advisable to clear these debts as soon as possible so that you can allocate funds for investments and other financial needs.
Meanwhile, those of us in our 30s who still have a reasonable amount of time before retiring can devise an investment plan to maximise the power of compounding. This will help our money grow to fund future retirement needs.
Within each life stage, there are different priorities, financial challenges and goals that we would face. Thus, by effectively planning for the next stage of life, we would be better positioned to achieve our financial goals.
Targeted Sum Needed for Retirement

**The above calculation is based on an average Rate of Return (ROR) of 8% per annum and investments made at the beginning of each month. The calculation is based on financial calculators and is for illustration purposes only.
When we start saving and investing early in our 20s and 30s, we are actually allowing time to be on our side. For example, an individual in his/her 20s who makes regular investments of RM285 per month will be able to accumulate RM1 million by the time he/she is 60 years old. In comparison, individuals who start to invest later in their 40s, will have to invest a larger sum of RM1,687 per month to obtain a nest egg of RM1 million at 60 years old.
Therefore, to have a smoother ride up until retirement, it is important for us to start investing as early as possible because the later we start, the steeper the climb will be.
This article is prepared solely for educational and awareness purposes and should not be construed as an offer or a solicitation of an offer to purchase or subscribe to products offered by Public Mutual. No representation or warranty is made by Public Mutual, nor is there acceptance of any responsibility or liability as to the accuracy, completeness or correctness of the information contained herein.