Can I Start Investing at the Age of 50?

Good morning and how are you doing??

Friday letters are usually dedicated to taking questions from our community. Do you have a question for us? Please feel free to send an e-mail to [email protected] or a DM to any of our social media channels.

Question?

Could you please explain how investors can earn from the capital appreciation of growth stocks? Do they sell it off?

Answer?

Let’s start off with what growth stock means. Growth stock is a stock that usually grows faster than its peers in the industry or the market at large. Companies with growth stocks are in their growth stage. They do not pay dividends.

Examples of companies with growth stocks are Tesla, Amazon, Facebook, Shopify, Square, Alphabet and so on.

Some people prefer dividend stocks because it comes from more established companies, comes with regular payment and is less risky.

Examples of dividend stocks are those from AT&T, Coca-Cola, IBM. This is not investment advice in any way.

Capital appreciation is the increase in the price or value of an asset.

It is basically the increase between the buying price and the present or selling off price.?

How do you then gain from capital appreciation??

When you choose to sell off, you would make a gain because you would be selling at a higher price than the price at which the stock was bought.

For example, if an investor buys Tesla stock for $705 and then the stock price increases to $805, and then decides to sell the stock at that price, the investor would earn $100.

Most people invest in growth stocks because it allows them to reap the full benefit of a stock's long-term market gain, considering that growth stocks would typically outperform the market.?

It also helps to substantially beat inflation and generate high returns.?

It also allows them to achieve a faster compounding of wealth, provided they are also able to withstand the volatility that may arise along the way.

Question

Is it too late to start saving and investing when one is in their 50s?

Answer?

No!?

It is not too late to start investing in your 50s. Think of it as a second chance and start now as long as you still have a source of income.

You can start by creating a budget, and including savings and investment in the budget.?

Do you have a health insurance plan? If you do, that’s great. If not, you should start planning towards that.?

Do you have children or dependents in school? You should also have a plan for them.?

You can start by saving your money in interest-yielding apps with your plan names.