Procrastination is your financial enemy

Procrastination is your financial enemy
 
Procrastination is one of those human foibles we all do at some point. It’s something we all knowingly shake our heads and chuckle at because it’s not quite the same as being lazy or incompetent.

Weirdly it has almost become socially acceptable. When the tools of our productivity (our laptop and smartphone) also provide our entertainment, procrastination is as easy and tempting.

Even the most motivated people on Earth can tell you about ‘that one time’ they procrastinated. For more normal people we do it regularly over major and minor things and it’s hugely frustrating. When we’re honest with ourselves, we know we could have done better by starting earlier.

It’s time to pull your socks up

It’s much the same when it comes to building your financial wealth and investing. The earlier you start the better off you’ll be. So we’re here to tell you to pull your investing socks up!

A lot of people are great savers. Diligently saving their salary every month and feeling pretty awesome about winning at life. Yet the little niggling at the back of their mind reminds them:

‘you need to do more than just save’.
‘You need to invest / buy a house / grow your savings’

You know that your money sitting in a bank savings account has terrible interest rates and leaving it there is losing you money over the long run.

But we often procrastinate when it comes to financial decisions and making our money work harder because it:

“seems too hard to deal with at the moment”
“I don’t think I know enough”
This cat video is way more interesting than my financial goals”

Normal excuses, but none of them hold up. With an automated investment service like Stockspot we invest for you in a diversified portfolio made up of ETFs that give you access to different investments – so you no longer need to be an expert to set up a smart portfolio. And while you’re telling yourself you’ll make time to invest next week you’re losing out.

Take advantage of compounding

Overcoming procrastination and investing as early as possible means you can take advantage of compounding. Compounding can make a huge difference to your final balance over a longer period.

Assuming a 9% growth per year (post-tax), an initial $2,000 investment would end up being $11,209 after 20 years with compounding. As you can see, the steepness of the slope increases over time. When investing in shares or bonds you can access compounding returns by re-investing the dividends and distributions you receive.

Compound interest

The impact of compounding gets bigger with time, the earlier you start investing, the better the result. Investing $2,000 at 25 as opposed to 35 could double the profit you make by the time you’re 50. So 10 year of telling yourself tomorrow means you’ll have half as much as someone who started today.

Compound interest - differences

Better still, putting a small amount of savings aside every month will help boost your final balance further. Even $100 a week could get you from $2,000 to $300,000 in 20 years.

Compound interest - regular top-up

You get the picture right?

Savings in a bank account is a good financial start but history shows that investing in a balanced portfolio and topping up regularly is likely to give you a much better long-term result.

There’s never a better time than the precious present to start investing for financial future you.

 

Grow your savings the smart way

Stockspot is Australia’s largest digital investment adviser. We can help you build and manage a personalised portfolio tailored to your financial situation and your goals. It’s professional investment advice without the high costs of seeing a human adviser.

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Lauren Franze

Head of Communications and Public Relations