Three financial perks of being young
For most young people, finances are terrifying.
Unless you were blessed with a mentor, who took the time to explain personal finance, you might be avoiding words like compound interest, 401(k), and emergency savings accounts.
The thing is — personal finance isn’t all that scary. In fact, when you’re young, you have more financial perks than when you’re old.
Push aside the fact that you may be saddled with suffocating student loan debt or that you may not know the difference between savings and checking accounts, and take a look at these three reasons why youth guarantees financial perks.
1. Time Is On Your Side
It’s all about time when it comes to making your money work for you, and it certainly does not happen overnight.
To best understand what I mean, it’s important to understand the power of compound interest.
Compounding Interest
Compounding interest isn’t all that terrifying, and it’s not too difficult to understand once you know the basics.
“For young investors, just getting started is critical because they have time on their side so compound interest can do most of the work.” says Timothy G. Wiedman, retired Associate Professor of Management and Human Resources at Doane University in Nebraska.
That’s right, you barely have to do anything to make compound interest work for you.
