Why to Invest?
Why to invest?
It really is nearly a theoretical question. Investing is the best way to secure your future. In this world there are two ways to earn income; one is to exchange you labor for dollars and the other is to have your money earn money for you. The rich know this and the poor don’t. It’s as simple as that.
Money kept in a “savings” account is earning interest at rates that don’t even keep pace with inflation, so you need to find the best place to put your money to beat inflation by a substantial amount. Average interest rates on savings account are currently less than 3-4%. Average annual returns for mutual funds are over 10%. Don’t understand what a mutual fund is or where you can find investments that will serve you well? You are in the right place to learn how to earn.
There is always risk in anything you do, but with education and research you can minimize that risk. As you get more education you can better decide how much risk you want to take and conversely how much return you need to make. Understanding the risks is the first step toward minimizing them. In fact, it is possible to make 10-15% annual return on your investment with almost no risk, if you know what you are doing.
One strategy that investors have been using for years is that of diversification. You do this by having investments in a range of different companies from blue chips to tech stocks, while also having some investments in bonds. To get a nice range of stocks some people use mutual funds to spread their investments without having to do a lot of research on different companies. This gives you diversification, and also has Professional Managers taking care of the research-end of that part of your investment portfolio.
There are many paths you can go down when you get into investing in the stock market, but one thing you can be sure of, “With education and research you will make money”.
You are already beginning your education here, that’s a great start. Continue on this road and make your money work for you.
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