Changes, Investing made in my life

I understood the magic of compounding at a very early age of life. Well, compounding is also referred to as the eighth wonder of the world.

I would like to include an instance of my life of how It came to me.

When I was still in middle school I opened my savings account, although my parents helped me open it as I needed a guardian for the procedure as I was underage since then I managed my own finances lived frugally as I could, and started saving. I really liked how the numbers started adding up and the all interests I earned from the term deposits. I would also like to add no one other than me knew how much I have saved and how am I using it. Some things are better not shared.

This went on for a couple of years and I realized if I ever want to build my wealth, it's never going to cut it with only saving. As from where I live the interest is barely even able to cover the inflation rather than earning any profits.

To start investing in my country one has to be at least 18 years of age as it required special documentation which could only be attained when one comes of age.

So, I made my first investment soon after my birthday, meanwhile, I didn’t waste my time just waiting to turn 18. I researched all the methods through which I could invest. I found about all different types of mutual funds, stocks, and index funds. Taking into account I didn’t have any prior experience so I chose the path of mutual funds based on index funds which are usually based on the whole market rather than a single company. I chose mutual funds based on that I can invest periodically rather than investing in a lump-sum. In this way, I don’t have to worry about timing the market and can still get above-average results.

Although investing early made me take more benefit of compounding, but still, the biggest benefit of this is entirely something else.

This has made me realize that it is fairly possible to create multiple sources of revenue and how important it actually is. By investing periodically, it has helped me create a discipline towards the goal of financial independence. With this, I have not only learned about investing but also many other important things like creating multiple sources of passive income and how important they actually are. I have also learned about how important and easy saving taxes are.

The only advice I can give is to be consistent no matter what and always remember to have an emergency fund in liquid in case something happens to the market or if you need something instantly.

I also have a perfect example of this scenario with the advent of the virus in 2020 the market crashed. It would have been foolish to take out the money in these times as it would have a great loss in this scenario the emergency fund would have helped. If even someone has consistently invested, they would have got great returns. Even I got an average of more than 40% p.a. on the investments I made in 2020 just because I remained consistent.

Thank You for reading it this far.

And just remember in investing discipline and time are your best friends.