When is the right time to invest?

I have read a lot of articles about investing and financial literacy. I also love watching ANC On The Money episodes as I learn a lot from it. And often I hear or read this question a lot.

"When is the right time to invest?"

Of course the answer is a resounding NOW. Why? Let me give you 3 reasons.

1.) Time

Time is the most important factor when it comes to investing. It is always better to start young so your hard earned money will have all the time for it to grow. Take for example a 25 year old yuppie who invests his 100 thousand pesos in a mutual with an annual return of 12% for 35 years. By age 60, he will have grown his 100 thousand pesos to a whopping 5,279,961 pesos. This is a good example of money working hard for you. :) On the other hand, if he started at age 35 (ten years later) and invested the same amount, by age 60 he will have grown his 100 thousand pesos to 1,700,006 pesos. In this scenario, delaying by 10 years will cost you 3,579,955 pesos. This is just a simple example but it clearly shows how important time is when it comes to investing.

2.) Circumstance

Everyone goes through different financial stages in life. The amount I'm able to set aside for investments is bigger now compared 3 years ago. I know that this will not be permanent so I try to maximize this situation. Another factor is that I'm still single and I just support my mom for her medicines as well as for the monthly salary of our helper (nanny) back home. 

I know for a fact that my expenses will become bigger by a wide margin once I get married and have kids so I take advantage of my situation now where I can set aside a big chunk of my salary for investments. What I'm trying to say here is that circumstances in life can also be controlled in your favor if you really want to invest in your future. To do this however, you have to be able to identify whether the decisions you are going to make is gonna negatively affect your finances. For instance, if you're a couple and you had a baby and you were not able to prepare for it financially, for sure it's gonna become a huge financial responsibility. It will be much harder for you to save and invest. Same goes to buying cars and not getting any ROI from it. Same goes to upgrading gadgets every year just to say to your self that you're "IN" when it comes to the latest gadgets. And the list goes on. These are things that we need to properly analyze first before jumping into conclusions whether we need it or not. Remember that usually as we grow older circumstance goes against us. Financial responsibilities gets harder and harder. Make sure you make wise decisions now while you still have time.

3.) Inflation

Let us define inflation first. Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service.

I remember my mentor once said, "Take advantage of this situation that you're able to invest in multiple properties as several years from now you won't be able to do it." This is because of inflation. Another common example is often you would hear from your parents or grand parents where they boast about how cheap the price of food or how small their allowance was during their time. The value of money depreciates over time. If you will not invest it, it will either lose its value over time or you will lose it forever (after spending into liabilities). On the other hand, if you invest it, you make inflation your ally. You will no longer get pissed when prices goes up because your investments or assets also appreciates in value.