Investing Money is Important

It was not too long ago that I met an old couple who were pretty well off. They had lived conservatively most of their lives and now are in retirement. They live in a small home and always made saving a priority. With the exception of one thing, they were the model financial experts. What’s that one thing? Refusing to invest money.

That’s right. For decades, they grew up in a world that was post-depression and feared to invest their money. This meant that they kept all of their money in savings accounts and “under their mattress.” While they could sleep easily knowing that their money is going to be there the next day, they overlooked important aspects of managing your finances.

Fighting Inflation

The first thing that they failed to do well is to fight inflation. With keeping their money in low-interest accounts, they actually lost money. In case you don’t know what I’m talking about, the price of items actually increases with time.. Traditionally, somewhere around 2-3%. This means that the purchasing power decreases with time. $100 today is worth more than it will be in a couple of decades. If you are not investing money today, you will find that you are losing money. How’s that for feeling that your money is safe?

Compound Interest

The other important reason to invest now is because of a thing called compound interest. Not only do you earn interest on the money that you invest (assuming a positive return, of course), but you will also gain interest on the interest that you gained last year (or last month). So, by keeping their money in savings accounts, they missed decades of compound interest. Their large nest egg that they had accumulated could easily have been worth 2-3x more if they had invested.

Invest Your Money Today

It’s impossible to know specifics, but I know one thing for sure. I won’t make the same mistake. My generation has faced similar returns in the stock market. This past decade has been one of the worst in recent decades and there is no guaranteed promise of it getting better. Yet, I know that without investing, I will be losing money – both due to inflation and missing out on compound interest.

That is what this blog is about. We will be aiming to teach you to invest your money. Investing money isn’t a big secret. But, it does take time to learn the basics and start investing in order to accumulate a small fortune. If you are looking to become a profitable investor, don’t delay. Start investing today.

3 Responses to Investing Money is Important

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    .