Young people often ask financial planners why they should start investing at 30 if they have 30 years to go until their retirement age. They argue that if they start at 40, they can make things work.

Unfortunately, the reality is that it may only be 10 years, but those 10 years of lost growth can often never be made up. No matter how much you intend to invest from the age of 40 onwards, you will not be able to make up for the 10 years of lost time. Often this will result in working far beyond your intended retirement age, because you have lost out twice.

You have not only lost 10 years' worth of contributions, you have also forgone 10 years of compounding growth - or growth on growth. This is what is nearly impossible to make up, no matter how hard you try, or how much you are able to put away. You may also have missed out on meeting some of your short-term financial goals such as an overseas holiday, a new car, buying a home, getting married, having kids etc. All of which need to be considered, planned, and saved for.

Achieve short-term goals

Those who start saving and investing from their first pay cheque will be at an advantage when it comes to accomplishing short-term goals. It also creates an essential discipline of paying yourself first. Most importantly, by starting early, you can take advantage of the compounding growth.

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