Young people! Let's save!

Moving away from the points we are currently dealing with, be it investment style, central banks, the US, I pose the following question: How important is it to put your money to work? It’s a message that those of us in the financial sector keep repeating to non-investors.

Life today is nothing like life in the 1980s. We young people have a tough road ahead of us financially. It is clear that our living standards will go down, we will have to work harder so that we can try to realise our dreams and goals one day, and of course try to give our children the best life possible.

One issue that is very much on young people’s minds is pensions – what are we going to do with them? We are aware that we are contributing, helping our elders, but it is becoming increasingly evident with each passing day that we will receive little or no public pension on the day of our retirement.  Moreover, the demographic pyramid does not help. Therefore, make your contribution to a pension plan from the investment company you are most comfortable with.

Going back to the beginning of the article, I reiterate this very relevant issue that many people overlook: How important is it to put your money to work?

Unfortunately for me, I was not introduced to the world of investment until I joined a management company. Nobody taught me how to invest in shares, nor did they explain to me what an investment fund was. I didn’t have that mentor that every young person wishes they had. The moment you make an investment and let time pass, you realise how important this aspect of your life is. It is irrelevant for those who prefer to keep part of their wealth in a current account but relevant for those who want their savings to grow. You start to realise that the money is working for you.

For people around me who are unfamiliar with investment funds or pension plans, I encourage them to make contributions, however small. The simile I use is: think of it as a snowball, which will get bigger as time goes by because of the contributions you have been making and most importantly, because of one of the most incredible mathematical concepts that many people don’t know about, compound interest, which has been generated in investments over time.

I always urge my friends to make investments (some of them even get angry), I don’t care in what! Financial, cryptocurrency or businesses. It doesn’t matter what! But they should invest, because there will come a time when they will regret not having done so.

Here is an example:

A close friend of mine, who works in a completely different sector, knows nothing about investments or the financial sector, and even had no idea of the savings situation. I told him that he had to start investing in his future with a long-term view.

After several weeks of talking to him, I encouraged him to make regular contributions. Aware that he would not need these amounts, he decided to go ahead and make them.

Being consistent, and even seeing that the fund was down more than 40% since he started investing, I was obviously a little scared and wondered: Is this going to go up at some point? Meanwhile, he continued to make his monthly contributions. Well, today this friend of mine is earning a 26% return since he started being a unitholder in December 2019.

When I talk to him I say: well done for persevering and the effort it takes in the short term. His response: thanks for showing me the importance of saving and for your help in making my savings grow.

His response is a great satisfaction at a professional level as well as a personal level, since my loved ones will be able to have a better future.

My objective in this blog is not commercial. My aim is to invite young people who are not yet investors to start investing as soon as possible in order to increase their long-term savings.