A question that all current investors have asked and those whom have not started to invest yet may also be asking. So read on to find out 6 reasons why you should be investing your money:
Increase Wealth
We all want to increase our wealth, right? In the long-term, investing could lead to your money growing and increasing in value.
If you research properly before investing, most investments could increase in value over the long-term. This is why it is so important to be thinking in the long-term when investing. Moreover, compared to saving money, investing could potentially provide you better returns.
Whilst you should not have all your money put into investing, you should have some money easily accessible – in your Emergency Fund.
Better return than savings
If the majority of your money is sitting in savings it could be potentially losing value over the long-term due to inflation. Through investing you could be potentially counteracting the loses that savings result in, due to the rate of growth associated with investments such as funds.
Compound Interest
Compound interest is one of the main reasons investing earlier on in your life will greatly benefit future you.
Compound interest is money earnt on your initial deposit as well as the interest you receive overtime. Think of it as rolling a snowball – the snow in front of the rolling ball is added to the snowball and builds up overtime to a larger ball. Albert Einstein regarded compound interest to be the ‘eighth wonder of the world’.
Your returns could build up overtime, so the more and earlier you are able to invest – the more you can generate in the long-term.
Tax Benefits
For those based in the UK – the government allows you to invest in an Individual Saving Account (ISA), which is a £20,000 limit you can invest tax free every tax year! The government created these accounts to encourage more people to invest. They were originally introduced in 1986 and were called Personal Equity Plans and replaced by ISA’s in 2008.
Want to learn how to start investing? Check out my blog post here for a step-by-step guide
Provides Greater Control of Your Future
Not only is investing a tool to allow you to save for later life and retirement, it can also provide greater control of your future.
For some people, they view their investments as a way to become Financially Independent and even Retire Earlier than the average retirement age. Whilst retiring early may not be a goal for everyone, if you can put more money into your portfolio from earlier, retiring early may become a viable option for you further down the line.
Investing can also provide another form of income – through dividends as well as the potential gains that your investments could receive. Dividends is a great form of passive income.
It has never been Easier to Invest
By making use of the many opportunities that are now available to you has made starting to invest easier than ever before.
From robo-investing platforms such as Nutmeg who choose selects where your money goes, information freely available and platforms charging no fees to invest with them – these have increased the opportunities for you to start investing. It is a great time to be an investor!
As listed above there are many reasons to start investing! If you are interested in starting, read these 5 steps to start investing!
Do share in the comments below why you started investing.