One of the most assured ways of achieving your long term financial goals is investing your money. This is especially true if you start early in life. Investing goes beyond just having a savings account, or a retirement plan, rather it extends to investing in stocks, bonds, bills and other financial securities.
Let’s look at the 5 benefits of investing money.
Investing will guarantee you a regular income
One of the obvious realities about life is that the older you are, the lower your income generating opportunities. This basically means that when you will get older, your opportunities to make money will diminish. It is therefore important to invest especially early so that by the time you can no longer work, your investments guarantee you a regular income such as through dividend, company stocks, treasury bonds or bills.
Investing leads to increased returns in the long-term
In as much as different investment options carry an element of risk, the potential for long term returns is usually high. To simplify it, if you hold on to your cash for 10 years, its value will more or less be the same down the line. However, if you put this cash in a good long term investment, you are guaranteed that 10 years down the line, this money will have increased by at minimum 50 per cent.
Investing is a great way to beat inflation
When you invest your money in a good venture, it guaranteed to increase annually at a percentage that is significantly higher to the inflation percentage. This means that your investment will cushion you every year from the economic effects of inflation.
Investing gives you financial flexibility
In economics, it is given that your financial situation will change from time to time. You may not have as much spending power 10 years from now as you do now. Investing will help cushion you from such eventualities. Starting to build your investment portfolio early will help grow your financial reserves which you can tap into when your regular reserves take a hit.
Investing can be suited for different financial objectives
Investing does not have to be for the purposes of retirement. You can establish an investment portfolio that is targeted at different financial objectives. The whole point about investing is so that you can grow your money therefore you can set targets such as buying a home, buying a car or going on vacation, and establish an investment plan on how to achieve these objectives.
Ultimately, the earlier you start investing, the more time you will get to learn the art and perfect it thus increasing your chances of getting a much higher payoff.