As the future becomes increasingly unpredictable, and social security benefits become unknown, investing has proven to be increasingly important over the years, especially when insuring the future. This is because investing allows you to build wealth steadily over a period of time, allowing you to accumulate wealth and let your money work for you. People know that depending on Social Security benefits or retirement plans may not be able to serve their needs to insure the future. Rather than getting a huge shock when they lose the ability to earn a steady income, people turn to investing as an answer to the unknowns that the future bring.
Rather than keeping money in a low interest rate savings account for decades, people are now turning to investment as a way to see their money grow. Only through investing will you be able to see your money grow at a much faster pace than through saving. Or perhaps you’ve inherited a tidy fortune or gotten a windfall. Again, investing will allow that sum of money to be put to full use and grow. This is a much better way of using money as your money will create even more money rather than being spent.
Of course, investing is not only to prepare for the future. Investing can also enable you to purchase certain ‘luxuries’ that your current financial situation would not allow you to. Investing is a way to attain a new home, a college education for your children, or even expensive holidays. Investing allows you to not only be debt free but also to enjoy such benefits that previously would have been unattainable. Naturally, these also fall into your financial goals which in turn determine what kind of investment you venture into.
If you are in need of money urgently, then high risk investment might be the solution as it will give you a larger return on your investments in a shorter amount of time. Although the payout is much higher compared to other forms of investment, you must note that the risk of losing everything is much higher when investing in high risk investment. Always follow your judgement calmly. Conversely, if you are preparing for your long term financial stability such as preparing for retirement, you would tend to make safer investments that grow over a long period of time. Once again, your type of investment depends on your financial goals.
All in all, the reason to invest is to create wealth and security over time. You will not be working and earning a stable income forever as eventually you need to retire. Everyone has to stop working at a point in time and it is important to keep this in mind when investing. Investing can allow you to use the money you have earned to generate even more money. This is the superior way to retire as you cannot expect social security to provide your expenses in retirement. And, as we have seen with the Enron incident, you cannot always depend on your company’s retirement plan either. Thus, smart investing is the key to financial security!
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