What is one of the benefits of starting to invest early?

One of the primary benefits of starting to invest early is the opportunity to take full advantage of compound interest. When you invest, the money you put in can earn returns, and over time, those returns can generate even more returns. This exponential growth effect means that the earlier you start investing, the more time your money has to grow. The concept of compound interest highlights that not only will you earn interest on your initial investment, but you will continuously earn interest on the interest that accumulates over time.

Investing early allows your investments to build on themselves, resulting in significantly larger sums of money over an extended period. This principle is crucial for students or young professionals who can leverage their time for growth before needing to withdraw or use their investments. The other options do not accurately represent the advantages of early investing; higher taxes and market fluctuations are inherent parts of investing regardless of when you start, and reduced risk in stock investments is not a guarantee simply because of early investment.