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by Marcie Kagawa, staff writer

 

If you aren’t investing right now, you’re missing a prime opportunity to make money. So, at least, say a number of Hawai‘i’s top financial planners.
America’s economy is in recession, and no one knows when it will recover, but what’s bad for the economy is great for investors. Marivic Dar, a financial planner and manager of financial services at the local office of Prudential Financial, said: “If there is a [good] time to invest, it is during a bad economy. Everything is on sale.”
It’s a common misconception that, when it comes to investing, you need to have a lot of money to make any money. The reality is that money grows over time, so even starting small can result in great wealth.
Everybody has at least a little capital, even if it’s only $5 a week, and most college students have one of the most important money-making tools on their side: time. Because of compound interest, which is when interest accumulates on your investment and your interest as well, your investment grows more the longer you leave it invested.
Say you spent $100 at the bar this weekend hanging out with friends. That $100, at a five-percent rate and compounded over 40 years, would grow to (insert figure here). If you invested $20 a week for the next five years, then left it alone for another 10, it would grow to (insert figure here). Get the picture?
Of course, the average college student probably doesn’t think too much further down the road than how much partying with friends next weekend might cost, but investing now can pay off big in the future.
Piece of cake, right? Wrong. Michael Cobb, a certified financial planner with Prudential, said college students don’t often pass through his doors because they “can’t see the big picture; they can’t see further down the road. Their priorities are different.”
Milton Kawasaki, a wealth management advisor at the local Merrill Lynch office, said that students “need to budget and save. Many young people live beyond their means. They want their parents’ lifestyle while they’re still going to school.” He added, “Most of them are not thinking about investing money.”
Kawasaki urges young people to find something or someone to inspire them, like reading a biography of United States billionaire Warren Buffet, who made his first investments at the age of 11. “Sometimes it takes inspiration to get you started,” Kawasaki said.
Dar cautions her potential clients that they must have money saved in a short-term account before thinking of investing for the future. She believes it is imperative to have liquid assets just in case of emergencies.
In the next few issues, we will look at different investment instruments and strategies. And even if by the time you decide to start investing America’s economy has improved, Cobb said, “There is actually no best time to invest. Just start when you can, when you have time and money.”
“ The rich are rich,” said Kawasaki, “because they put in the time and effort.”

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