As the Chinese proverbs stated, “the best time to plant a tree was 20 years ago. The second-best time is now.” This is similar to start saving as early as your 20s. Why? To prepare for the opportunities that await you.
Time is money. All investors treat time as the most valuable asset because they could not gain it back once they lose it. When you start saving as early as your 20s, you can accumulate greater value than saving in your later years. Not to mention, successful investors save in their early years so that they can own their time in the future. These types of people do not want to be at the mercy of their employers. Thus, they save to earn back their time.
Respectively, as young as you are today, you have extra money to save compared to when you gain dependents on your next years. This is one of the things you need to consider when saving, time is truly precious.
Another reason why you need to start saving right now is the opportunity cost. If you are not that liquid when a great opportunity to invest comes, you have to forego the chance of your money to grow. And remember, the opportunity will only knock once.
Moreover, market trends are an opportunity. Once you have savings, you can ride on to the opportunities that are waiting, especially for long-term investments.
Further, saving in your early years will help you prepare for recessions and calamities. Emergency funds play a significant role in life. It enables a person and even families to survive when fortuitous events may occur.
Indeed, the Chinese proverb is right. It is better to start saving now rather than be sorry when something might happen in the future. You do not need to save that much now, what is important is that you are constantly saving money until you get the financial freedom that you are desiring.