Many people wonder: why should they invest? The answer to this question is very simple and clear i.e to create wealth and prepare for the future. To achieve your financial goals like buying a house, vehicle, foreign vacation, retirement, etc, the importance of making an investment must not be ignored. One of the prominent reasons for investing is that if you do not wish to invest money and keep it with you, then your money is just sitting idle, in other words, it is not working you. The money that you have is the one you saved. You can plan to grow your hard-earned money by investing in the various financial instruments, offering attractive Return on Investment (ROI) or by purchasing and selling assets that increase in value over a period of time.
People have different viewpoints when it comes to investing. Some people think that putting their money into the bank savings account provides them with an excellent interest rate, then why should they search for other avenues of sources of investing? However, not all the people think in the same manner. There are many people, who plan their investments intelligently and gain profits out of it. If your dream is to have a huge corpus of money, then making an investment makes a great sense. It is never too late to plan to invest. The earlier you make an investment plan, it will be BETTER and EASIER for you to materialize your financial goals.
Here are some varying reasons to invest. Let us look at a few:
If you want to be financially secure, then it is quite obvious that you will need to have extra money. It ensures that you are able to safeguard yourself financially against the major financial hardships, which may crop up in the future. For instance, a major health crisis in your family, providing higher education to your kids, destruction of the home by a fire. Having some kind of an investment will ensure that you are thoroughly protected and financially secured to take care of such unforeseen events in a hassle-free manner.
Creation of Wealth
Formulating an investment plan is absolutely essential to create or build wealth. Many people first save the money and then invest their savings on different financial instruments over a period of time. In this process, whatever extra income has been accumulated from the investment like the bank fixed deposits (FDs), mutual fund dividends or income from the sale of property can be reinvested further in other financial instruments or something else. Hence, in this way, you can initiate the investing process and continue building your wealth.
Making an investment helps you to be financially independent, which means that you will not be required to depend on others in case of any financial hardships. It is no doubt one of the prominent advantages of investing. It reduces your dependency on others every time for money and ensures you take care of the important needs for the rest of your life easier without having to work in your old age.
Achieving your Financial Goals
You may have some specific financial goals in your mind like buying a car or home, taking a world tour, etc, hence, it becomes important to invest to achieve those goals. Whatever financial goals you set must give you the motivation to work harder and invest. To achieve your goals easily, it is important that you must make a comprehensive investment plan, list down your goals along with the total money required to achieve the listed objectives. The goal that you actually set can be short-term, medium or long-term in nature. It is imperative that whatever investment decision you take, it must be in accordance with your set goals.
What are Benefits of Investing Early
There are many people who like to spend big bucks on lots of items such as clothes, food, fashion accessories and so on. They do this to add stars to their lifestyle. However, they do not give any damn towards saving money, which is so essential to start, mainly from the young age. No one can predict the future and the major problems in life can crop up without any announcement. It is highly important that you must prepare for the potential troubles by saving early.
If you are thinking why it matters the most to prepare a financial investment plan, then have a look at the prominent benefits of investing early.
Limits the Unnecessary Spending Habits
The number of clothes or electronic devices will not matter the most but your investments would. It is highly important to keep a tab on the unnecessary spending habits to ensure that you have enough money saved for the rainy day. If you keep some percentage of money in your savings bank account or invest money in various financial avenues such as the stock market, fixed deposits, bonds, etc, then do not touch or spend the extra income you have generated. Hence, in this way, you are only saving your hard-earned money, instead of purchasing unwanted items.
Gives you an Opportunity to Chase Your Dreams
There may be some dreams that you may be chasing such as buying your home, getting a brand new car or going for a foreign vacation. However, these dreams take a backseat because of your busy lifestyle or work. What matters the most here is how much you have actually saved to materialize your dreams? If your is answer is ‘NOTHING’, then it is better late than never. You must initiate the process of saving at a very young age so that you do not have to repent later.
Helps you Take Care of the Testing Times
You do not know when your employer asks you to resign or the health of your beloved family member deteriorates. If you do not have cash in hand or money in your bank account, then you may have to borrow money from your friends or colleagues. In this case, you will be under heavy debt. It is important that you must save enough money to ensure you sail through any problems hassle-free.
It is important to remember to investing helps a lot in reaping rich dividends as it is all about growing your money and achieving your financial goals. However, what is imperative to remember that any investment decision must be taken cautiously. You must weigh down the prominent pros and cons of an investment you are planning to undertake to ensure that maximize your profits and chase your dreams easily.