The Power of Investment: Small Steps, Big Impact

When you invest, the most important thing is to do it consistently and continuously for an extended period.

Furthermore, avoid frequent withdrawals of your investment capital and annual dividends unless there is an urgent need.

By making both practices a part of your investment, your capital will multiply, even if it's only RM50 monthly.

Through a conversation with a certified financial advisor, he stated that consistent investing and reinvesting dividends are the foundation of the concept of compounding.

What is the power of compound interest? Compound interest allows you to earn returns on your investment capital and the annual dividends you receive, resulting in returns on top of returns.

This double injection of returns allows your investment to grow faster. The total savings will also be more significant if you have a long investment period.

For example, you invest RM150 a month for 20 years in an investment institution with an average annual return of 5 percent. You will have savings of approximately RM78,000 at the end of your investment period.

If you invest RM50 a month, you will accumulate approximately RM26,000 at the end of your investment period.

Investing at An Early Age

Imagine if you made such a commitment for your children from 6 months? Indeed, when they start their university education, they will have enough savings for their respective studies.

Isn't it fascinating to see how an investment as low as RM50 per month can help you build savings of RM26,000? Most importantly, it may happen without you realizing it since RM50 is small and may not even disrupt your monthly expenses.

After reading about the power of compounding interest and its impact on your investments, you are likely interested in consistent investing. Unfortunately, you may not have the time to go to the bank every month.

Don't let issues like time constraints or busyness prevent you from enjoying the benefits of investments generated by the power of compounding, especially when today's technology puts many things at your fingertips.

Conveniences such as monthly salary deductions through employers, online investments, or standing orders with the bank can help you make consistent monthly investments.

Consistent Monthly Investments

For example, you can make monthly salary deductions as low as RM10 if you invest in Amanah Saham Bumiputera (ASB).

Don't underestimate the significance of investing as low as RM10 because, without your realization, with the power of compounding, it can grow to approximately RM5,000 after 20 years when invested in an investment that yields an average return of 5 percent annually.

Since this salary deduction facility is free, you will enjoy the returns earned from your investments.

Therefore, use the available conveniences and technology to make consistent investments. This way, you will remember to invest.

Instill in yourself that investing is an expenditure that will ultimately benefit you. Otherwise, the savings you build will help you in times of emergency or when you retire.