4 Reasons Why You Should Invest
Updated: Jun 7, 2020
Investment is not nice – it’s the best.
Generally, anything that generates a return is an investment. Even your savings account, which earns you 1% interest is an investment as. For those who aim to break the rut of struggling financially and want to achieve stability, investment is inevitable.
Still not convinced? Here are our top four reasons why you should start investing today.
1- Beat Inflation
If your earning is not growing, you will succumb to inflation one day. Inflation, by definition, is an increase in the prices of things and, in consequence, a decrease in the value of the currency. It reduces the purchasing power of a person. Taking into consideration the past trends, inflation hovered around 2%, which means if your earning is not growing at least 2% a year, you will soon be out of the race.
Investments, however, can have unlimited upside increasing earning up and keeping you way ahead of the inflation.
2- Quit the Rat Race
This goes without saying, you cannot alienate yourself from the rat race no matter how much hard work you do in your job. As the investment guru Warren Buffet said, "you know...you keep doing the same things and you keep getting the same result over and over again."
Investments, therefore, is the only way by which you can build wealth and quit the rat race. It always provides a helping hand to a man struggling with financial instability.
3- Investment beats savings
It is tempting to keep your dollar in the bank and receive interest without doing anything, right? And yes, your money is safe too, which you can withdraw at any time. But frequently savings rate are less than inflation rates. That means, if you continue keeping your money in banks, you might reduce your purchasing power.
On the other hand, investments pay potentially higher returns and can keep your boat floating in high inflation as well. For this, you should always know the nuts-and-bolts of investing and choose your route wisely.
4- Achieve Your Financial Goals
Every one of us has a few financial goals. They can be buying a new house, a brand-new car, a world tour or even becoming financially independent. But all these dreams can remain only a pipe dream if one keeps a safe distance from investing.
Only investments can fulfill your dreamed wants and needs. Without investments, you cannot even afford a better college for your kids let alone have a plan for your retirement.
Where Should You Invest?
Now, once you informed yourself about how important investments are, it is imperative to address the question of ‘where you should invest your hard-earned money?’.
When it comes to investing, there are many routes that you can take. One, I recommend is to get in the game by yourself through one of the many online trading platforms. In fact, some of them offer social trading where you can follow successful traders and they just do the work for you.
The rule of thumb is that great return comes with greater risk. So, it is advisable to not put all your eggs in one basket and hold a mix of low and high-risk investments. Invest a certain amount in ETFs, bonds, and common stocks and for this, you do not have to go anywhere. Online platforms allows you to invest the amount as low as $500 in your investment portfolio while sitting at home.
Bottom line, nothing is better than investment. You just need to educate yourself and trade carefully.