Invest tax free as soon as you can for as long as you can

Invest tax free as soon as you can for as long as you can
“The first rule of compounding: Never interrupt it unnecessarily.” – Charlie Munger
March 2024· 3 min read
THE QUICK TAKE
Take advantage of your annual tax-free investment allowance as early as possible in the new tax year
This means that your investment can benefit from tax-free growth 365 days sooner
Allowing your tax-free investment to grow for as long as possible can be life-changing
And choose a fund that allows you to remain invested for as long as possible

Perhaps you missed the February deadline to invest tax free? The good news is that you don't need to wait until the end of a tax year before putting your savings to work. By investing as early as possible in this new tax year (which started 1 March 2024), you can reap the full rewards of tax-free growth sooner. Here are some pointers to help you make the most of your tax-free investment.

1. IF YOU CAN, STAY THE COURSE

The late, legendary Charlie Munger said that one should never interrupt compounding unnecessarily. This is because your investment can grow exponentially the longer you remain invested.

The same goes for a tax-free investment. When you harness the life-changing effect of the higher compound growth in a tax-free investment compared to that of a taxable investment option over time, you can double the value of your investment in real terms. See the illustrative example below.

Read full article on:  https://www.coronation.com/en-za/personal/latest-insights/personal-finance/invest-tax-free-as-soon-as-you-can-for-as-long-as-you-can-march-2024/

April 19 2024 By Coronation