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 five per cent 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 six per cent 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.

Ingrid Micallef is head, products and marketing,, at MeDirect Malta.

This is a marketing communication from MeDirect Bank (Malta) plc. 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.