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Trading at an early age

When it comes down to the technicalities as long as you have a guardian’s consent or are of legal age, you are eligible to buy and trade stocks and shares at a stock exchange of your choosing. Now granted not everyone would be interested in doing so; I for instance would have most likely spent that money on an unforgettable night out or a brand new piece of tech, however today my perspective has changed to quite an extent.

In reality, the sad truth is that we are all seen as young for a short period of time, therefore thinking on the long-term future is not such a bad idea. In fact, getting a head start on your finances bring forward several benefits with little draw backs, the main of which may be found below:

Pros

It improves your spending habits, as those who invest early on are much less likely to have issues with overstepping their boundaries in spending in the long run.

Buying shares of stock means taking on an ownership stake in the company in which you purchase stock in, therefore if done wisely this could stand as a long term investment that could potentially increase your affluence.

It offers diversification in your personal finances, acting as a plan B of sorts if you ever happen to fall on hard, financial times.

You can experiment. What I mean here is that at a young age you are able to make mistakes, try different strategies, and more importantly learn from said mistakes.

Most of the leg work is done for you. With a simple Google search you will find that in Malta alone there are several methods and organizations available, that provide a trading platform, taking away a great deal of risk and simplifying the process to a great extent.

Cons

Investing is still investing, i.e. there will always be some risk no matter how secure a stock may seem. This is where calculated risks come into account.

WHAT HOLDS SO MANY BACK FROM TRADING?

As a fellow young person myself, I strongly believe that what holds so many back from trading at a young age is the simple act of procrastinating. Procrastination is never good, but it can be especially detrimental while investing because the markets move so quickly. In saying so, identifying a good opportunity and putting it off will only result in you staying in the same place. Therefore if you have the ability or desire to trade, the best advice anyone can give you is to just start.

Following the story of one Christopher O’Connor, who had started trading at the age of 13, he had started trading in small stocks here and there, and stands with a one-year portfolio return of about 35%, ensuring a comfortable retirement and the ability to read for his MBA at the University of Monaco, at the age of 21.

At the end of the day, you don’t need to be a mathematician or hold a profound understanding of everything going on in the financial world, it all starts with a little determination, a small investment, and a keen interest to learn.

This article was issued by Steve Diacono for Calamatta Cuschieri. For more information visit, www.cc.com.mt . The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.  

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