Reasons why young people must start investing immediately

Ah Yu is 32 years old and has worked in a foreign-owned packaging factory for 8 years, earning a monthly salary of about 50,000 yuan. His wife earns about 30,000 yuan a month. With their year-end bonus, their family income seems to be over 1 million yuan a year. However, after deducting rent, car loan payments, nanny fees, filial piety expenses, and living expenses, they can actually save very little money.

It's not that he's lazy or wasteful; it's just that he comes from a typical modern young family: they have income, but the pressure is just as great. Watching housing prices rise higher and higher, they want to buy a house and settle down, but it always feels so far out of reach. This is why young people can't rely solely on "working hard" as their only financial strategy. It's okay not to have a rich father, but at least you should start using your money to build up your future.

Inflation is eating up your income

Many young people don't lack the desire to work hard; rather, after striving for a long time, they find their salaries can't keep up with housing prices, and their savings can't keep up with inflation. This leads to a sense of complacency, a "just live for today" attitude. But the reality is that prices don't stop just because we're tired. Fried chicken, coffee, bubble tea, toilet paper, rent, insurance, transportation costs—these everyday necessities are all getting more expensive, little by little. Therefore, investing isn't about sacrificing your life or forgoing enjoyment; it's about ensuring you have a future while enjoying the present.

Avoid becoming a vulgar old man

The term "low-income elderly" originates from Japan and refers to a state of being characterized by low income, low security, and limited choices in old age. It sounds heavy, but it serves as a reminder of a very real issue: if you don't accumulate any assets for yourself when you're young, you're likely to be left with only passive choices in your old age.

Talking about retirement now seems too early. But by the time you actually feel retirement is near, you often have very little time to prepare. Investing isn't about making your old age luxurious, but about giving you the ability to choose whether to continue working, where to live, and whether you can take good care of yourself when you're sick, so that you don't have to be driven by money in everything you do.

"Shōrū lōroku" is a new term that has emerged in Japan. It refers to elderly people who live a low-class life.

People who still have the idea of buying a house

If you still harbor thoughts of buying a house, then investing in it is not a distant dream. Current housing prices are indeed unaffordable for many young people, making homeownership feel like a burden rather than a dream. However, without starting to accumulate assets, buying a house will remain merely a matter of complaining and imagining.

Buying a house doesn't necessarily require getting rich overnight; it's more often the result of long-term income, savings, investments, and discipline. Investing doesn't guarantee you can afford a house, but it at least gives you a better chance of getting closer to your goal than simply saving money.

Warren Buffett famously said, "Investing is like rolling a snowball. If you find a road with wet snow and a long slope, the snowball will just keep rolling and getting bigger."

People who aspire to financial freedom

What is financial freedom? It's the FIRE (Financial Independence Retire Early) concept that's become popular in recent years. Financial freedom means having enough money to use without having to work. Early retirement doesn't mean not working, but rather not having to work for money and being able to do what you want. For salaried workers to achieve financial freedom, you must invest and manage your finances. This doesn't mean you have to start a business like Terry Gou or Morris Chang, but rather that you need to understand financial knowledge and accumulate assets through investment to achieve your financial freedom (FIRE) through passive income.

FIRE (Financial Independence Retire Early) means "financial independence and early retirement".

Doing nothing is the riskiest time.

My parents often told us that starting a business is very dangerous and could lead to financial ruin. They used their own failures to warn me against investing in businesses lightly, advising me to just work hard. As a result, I only dared to put my money in bank fixed deposits and buy savings insurance. I did nothing or made the wrong decisions at the age when I should have been investing and managing my finances. At first glance, there seemed to be no loss, but in fact, doing nothing is the riskiest time. Because if you don't invest any more money, your 1 million will be 14.78 million in 35 years (calculated at 8% compound interest). If you do nothing, your 1 million will still be 1 million, and it may even have the purchasing power of only 800,000 due to inflation.

Achieving an 8% return on long-term investments is not difficult. For example, the annualized return of the Yuanta ETF (0050) over 15 years is approximately 8% to 11%.

Saving 7,148 yuan per month will still amount to 14.8 million yuan after 35 years.

Image: MSN Finance

in conclusion

Many people believe that investing is risky, so doing nothing is the safest option. But what really needs to be recognized is that doing nothing is also a risk. If you don't invest, you may avoid market fluctuations, but you may not avoid inflation. If you don't start managing your finances, you may not face the pressure of losing money for the time being, but you may find that in 10 or 20 years, you still have to rely on your salary to make ends meet.

Young people start investing not because they're already rich, nor because they want to get rich overnight, but because they know the future won't magically become easier. It can be slow, it can be small, it can be conservative, but don't stay stagnant. Time is a young person's greatest asset, and the most regrettable thing isn't earning little at the beginning, but having the time yet never starting.

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The author has no financial dealings with Yuanta Securities Investment Trust. The content of this article represents only the author's personal views. Please think independently and make a careful assessment before investing, and be solely responsible for any subsequent profits or losses of any investment.

(This article is copyrighted by Darryl. Unauthorized reproduction of the text and images is prohibited.)