INSIGHTS

Published in MiNDFOOD magazine.

Often we think we should postpone investing until we have more funds, fewer calls on our money, or better knowledge at our fingertips. But often the best time to invest is... now.

Remember when the end of 2020 couldn’t come soon enough, and we believed 2021 would bring with it the end of the pandemic and all its associated problems?

Few of us predicted – or were willing to accept – that we might have another year of ongoing outbreaks, lockdowns and the uncertainty that came with them. As we move into another year, we’re hoping that this time we really can look forward to brighter days ahead.

But no matter what the future brings, it’s time to make a plan – if COVID-19 has taught us anything, it’s that nothing is certain and that setting ourselves up for financial security is essential.

That may sound like a daunting task, but taking control of your finances and making plans for the future needn’t be difficult. In fact, with the help of an investment adviser, you can put your money to work while you rest up. For the healthiest returns, the key is not to delay – the sooner you begin investing, the more you’ll have to show for it.

PROCRASTINATION WILL COST YOU

No matter what task it is that you’re putting off, we know that procrastination rarely delivers positive results, and that’s demonstrably true when it comes to investing. There are myriad reasons someone may hesitate to begin – whether it’s worry about not knowing enough about the process, a belief that investing is too complex, or a misconception that it’s risky.

Maybe it’s simply being unsure whether the time is right. If markets have been going well, you might be concerned about investing at the top. Or if we’re in a slump, you may feel as though it’s safer to wait for the future to look more promising. But when it comes to developing an investment strategy, the best time is often right now.

Time in the market is what will arguably have the single biggest influence on the end result. A Craigs Investment Adviser will work with you to understand your objectives and help your reach them – they’ll figure out a strategy according to your individual situation and the market conditions at your point of entry.

When it comes to perceived risk, the truth is that it could be riskier not to invest if a secure financial future is the goal. Having some proportion of your wealth in growth assets, like shares, may be essential to ensure your investments keep up with inflation. Inflation can decimate your wealth even at relatively modest levels, but right now, it’s surging. If you want to protect what you’ve worked so hard to accumulate, you’ll need your money to provide a return that at least matches the inflation rate – or higher, if living off your investment and spending some of your returns is your intention.

WHY YOU MISS OUT IF YOU DELAY

Waiting to start your investing journey also means missing out on compounding returns; the reinvestment of the money you’re earning on your investment – a concept Einstein referred to as “mankind’s greatest discovery”. For example, let’s say you are getting an interest rate of five per cent every year. You put $100 in today, and it’s worth $105 in a year’s time. During the second year, you’re still getting your five per cent interest rate, but you get that return on $105, rather than just $100. Each year you’re getting interest on last year’s interest, too, so the returns are growing all the time, as is your pool of capital. Quite simply, it means the earlier you begin an investment, and the longer the money remains invested, you are earning income on your income, all without having to lift a finger. The chart below shows the difference 10 years could make, demonstrating the power of compounding and why starting early is essential.

YOU DON’T NEED TO BE WEALTHY

A common misconception about investing is that you need to be wealthy. But the success of your investment can depend less on the amount you start with, and more on the time you invest for. With Craigs you can invest anything from $100 per month or a lump sum of $1,000.

Writer Steven Pressfield once said, “Start before you’re ready”. It’s apt advice for investing, because there really is no benefit in delaying.

So, when you have a few minutes to spare, open your calendar and pick a day to get in touch with a Craigs Adviser and make your way towards a more secure financial future.

Craigs Investment Partners is one of New Zealand’s leading investment advisory firms, helping New Zealanders grow their wealth with more than 170 qualified investment advisers across 19 branches from Kerikeri to Invercargill.

To discuss your investment goals and needs, contact a Craigs Investment Adviser for a free no-obligation consultation. They will help you understand the most suitable service options based on your circumstances. Get in touch by phoning 0800 272 442 or visit craigsip.com