In our quest for financial independence, it’s not a secret that we have started investing our money. Just like any other millennial couples we also asked the big question – “when is the best time to invest?”
Registered Financial Planner Randell Tiongson said “the best time to invest was yesterday, the next best time is today, and the worst time is tomorrow.” Others would say that the best time to invest is when you have money.
Based on our experience, I would say that the best time to invest is WHEN YOU ARE READY.
You shouldn’t just invest immediately because you regret that you missed your chance yesterday. Just because you have an extra money today doesn’t automatically mean you should open a trading account. You shouldn’t buy shares just because your friend told you that the stock market is going well.
Here are some of the questions to ask yourself to decide if you are ready to invest:
- Have you understood the basic concepts of investing? Legendary investor Warren Buffett defines investing as the process of laying out money now to receive more money in the future. This just means that it will take time to reap your success.
- Have you done a little research about the investment type which you prefer? There are different options where you can invest your money like stocks, mutual fund, variable life insurance and many more. (To give you an idea, you may ready my article on simple investment guide for millennials here)
- Do you have a reliable friend (or financial advisor would be better) who can guide you on your investment? For beginners, doing research is good but having also someone who’s knowledgable in investing will help you invest your money better.
- Do you have enough savings and emergency fund? Savings and emergency fund is different. Emergency fund is the money you set aside which you can use in case you experience a financial dilemma (job loss, hospitalization). Recommended emergency fund could be 1-3 months worth of your salary.
- Are you ready to risk? The last but the most important question you need to ask yourself is your readiness to take risks. Investing is different from savings. There’s no 100% guarantee of how much money you can get in return.
If you still have uncertainties on some of the questions, don’t rush yourself. If you answered ‘yes’ in the five questions, congratulations! You’re already prepared to invest.
There’s no perfect timeline for investing. The only best time to invest is when you’re ready. It’s better to be financially and psychologically ready rather than go to the battle unequipped.
It is important to start investing when you are young. The magic of compound interest is amazing.
Yes, investing when you’re young is definitely great. I still wish I invested earlier but I’m not yet ready before. What’s important is we’re now ready and we have started investing.
Very interesting post! I know that it is a matter of time before I decide to make an investment, but like you said, I will do it when I am ready to. 🙂
Take your time, hope you get to invest soon 🙂
It’s really important to know what your getting yourself into when it comes to investing. I am always scared of the risk I would be taking but it’s still something to think about.
It’s really difficult to risk especially when finance is involved. I hope you also get to invest soon!
great advice I always find investing scary to go into as I feel severely uninformed and such a big risk I am scared to take the leap
Thank you! I hope I was able to inspire you to take the risk and invest soon 🙂
Investing can be such a scary thing for those who haven’t done it yet. I think the way you closed the article was great: “Just like in a relationship, the best time to invest is when you’re ready. It’s better to be financially and psychologically ready rather than go to the battle unequipped.”
I was once afraid to invest before. Thank you, Sarah!
This is a very nice post. Interesting points, especially the “emergency fund” part. 🙂
What an informative post! Not many people are aware of what they’re getting themselves into.
Thank you, Sondra!
I really feel like when it comes to investing you really need to do your homework. this is such a great and well-informed post on investing. it can def be something scary and intimidating.
Hi Andrea, research and proper guidance is needed when you invest. Hope I was able to inspire you to invest!
Needed this content today. After a tough day spending time with quality self help blogs is really a great refreshment. Thanks for sharing 🙂
Thanks, Nik! I hope I was able to help you in a way.
I hope people understand the risks and get educated but I also think the sooner the better! 🙂
Yes, the sooner the better but let’s not forget the readiness. Thank you, Cathy!
I believe, in investing, the best time is now. But it is also prudent that one is ready and understands the whole thing of saving up.
Some interesting points and questions for people to ask themselves before they think about investing. Useful to read, thank you.
Investment always comes with risks. So I think it’s also important to allow yourself to make a few mistakes.
I definitely agree that investment should be made while at young age so that in the near future you can see the fruit of your investment. Being prepared and being motivated to work on that investment are the key to success.
I hope to be able to invest in the near future. It seems like a good opportunity to make money without much effort.
Great read! Investing is so important, it is something they should teach everyone. Its always good to start as soon as you can.
Good points. I, too, works in an insurance company. And I’ve also previously worked at a bank. I can attest that it’s always better to invest in an insurance than in bank deposits.
This is so important! Everyone must learn how to invest 🙂
Rather than learning how to calculate on paper miles per hour (which a speedometer can do for you), they should teach kids about money, and taxes or things like mortgage and credit. In this case investing! I wish I could have learned these things in school instead of learning it the hard way. Thanks for sharing! 🙂