Picture your Future. Save for it by earning 1.5% on a 1-year Term Deposit Account! Learn more.

In investing, time really can be your friend.

By Ingrid Micallef, Head – Products and Marketing at MeDirect
Article published on the Sunday Times of Malta

Making the most out of every euro you invest is a challenge for even the most knowledgeable and experienced investors. But there’s one thing that history has shown and that is that time is practically guaranteed to give you an advantage. That’s why it is recommended to start investing early on in life.

The difference in outcome for those who start investing in their early 20s versus those who start in their mid-30s can be quite astounding. A 22 year old who invests €200 a month and earns 5% per year will have more than €360,000 by the time they are 65. The 35 year old who invests €300 a month and earns 6% a year will, by the age of 65, only just break through the €300,000 mark. That’s the power of compounding which delivers much better results than what could be achieved from larger investments with better annual returns made later in life.

The difficulty, of course, is that many 22 year olds do not have high salaries and are probably more interested in spending what disposable income they have on entertainment or other expenses such as a new car. Retirement seems a long way off and certainly not a priority. While the desire to have fun and enjoy life is very understandable, as we have seen even investing small amounts each month can make a massive difference later on. Moreover, young people who have been through the education system in Malta start off with two huge advantages over their peers across Europe. Firstly, the fact that University education is free means there is no debt that needs to be paid off. This, coupled with the fact that many young people in Malta also remain in their family homes in their 20s, should make it easier to find the few euros needed to begin investing each month.

For those who do have the foresight and the discipline to start investing early in life, what to invest in becomes the next question. There are, after all, thousands of individual stocks, mutual funds and exchange traded funds (ETFs) to choose from. With time on your side, you don’t need to overcomplicate things and can afford to focus on low cost, broadly diversified investments. The 40 year plus time horizon does offer the opportunity to choose aggressive stock-heavy funds in the early years to push for growth before gradually becoming more conservative as retirement draws closer. Building a well-diversified investment portfolio need not be complicated if you stick to managed mutual funds or ETFs which track the performance of a particular market or industry.

MeDirect, through its market leading online platform and mobile app, offers investors the opportunity to search for and filter mutual funds and ETFs, from some of the world’s leading fund houses. Detailed information is provided on all available funds and ETFs, together with analysis from Morningstar, one of the world’s leading investment research firms. Customers of MeDirect can also use the online platform and mobile app to invest in individual stocks or to select one of MeDirect’s other investment products, including MeManaged, Malta’s first fully digital discretionary portfolio management services.

MeDirect Bank (Malta) plc is licensed to undertake investment services under the Investment Services Act (Cap. 370). If you invest in these products you may lose some or all of the money you invest. The value of your investment may go down, as well as up. A commission or sales fee may be charged at the time of the initial purchase for an investment. Any decision to invest should always be based upon the details contained in the Prospectus and Key Information Document (KID), which may be obtained from the Distributor.

Join MeDirect today to access the tools you need to put your money to work on your own terms.

Latest news articles

Japan stocks: high can go higher
All News

BlackRock Commentary: Japan stocks: high can go higher

BlackRock is optimistic about the potential continuation of Japan’s equity rally, distinguishing it from previous false starts. They anticipate that both macroeconomic trends and company-specific advancements will propel the next phase of growth. The anticipated corporate earnings growth, foreseen since 2023, is now materializing as expected.

Experience better Banking

The sooner you start managing your money, your way, using the best-in-class tools, the sooner you’ll see results. 


Sign up and open your account for free, within minutes.

MeDirect_Multi-Devices-cards

Login

We strive to ensure a streamlined account opening process, via a structured and clear set of requirements and personalised assistance during the initial communication stages. If you are interested in opening a corporate account with MeDirect, please complete an Account Opening Information Questionnaire and send it to corporate@medirect.com.mt.

For a comprehensive list of documentation required to open a corporate account please contact us by email at corporate@medirect.com.mt or by phone on (+356) 2557 4444.