Investing can be a daunting task for some people because they’re aware that there are a lot of risks involve with it, or maybe they just happen to watch the movie “The Wolf of Wall Street” that made them second guess if investing can really lead them to any good.
Are you afraid of investing?
I’m not. I know for myself that investing can help me achieve my goals, and one of them is to be financially independent myself. I also believe in this quote below.
Risk comes from not knowing what you’re doing. – Warren Buffett
That’s a great quote from the most popular and most successful investor of his generation, the Oracle. If you would like to learn more from Mr. Warren Buffett, you can read this article I found at ModestMoney.com: 6 Things Everyone Can Learn From Warren Buffett
Now, let me tell you more things about investing, and why you should try it out as early as possible to enjoy its great benefits.
5 Benefits Of Investing
It can give your financial life a boost
Are you looking for something to boost your finances?
Well, look no further because investing your saved money can help you with that.
Sure, there are risks in doing it, but if you really want to get better returns for you money— you’re going to invest, and not let your money sit in the bank where they will only give you very little return for trusting them your money.
Also, if you ever try to invest your saved money, you get the chance to choose from different investments that will fit to your personality and your goals perfectly.
- Bonds– good for those people who are afraid to take too much risk, and are seeking for guarantees, but be aware that this investment has a very low interest rate
- Real Estate– can be a tricky investment, but can be a good one for the right kind of people
- Currencies– high risk investment that’s not good for novice investors
- Mutual Funds– great for beginners looking to test the investing world, just be mindful of the fees that you’re going to pay
- Stocks – the perfect investment for those willing to invest for a long time, and are looking for good returns, but is not a very good investment for those afraid to take in some losses every once in a while
- Other investments you choose from are ETFs, P2P loans, collectibles, commodities (e.g. gold, silver, oil, livestock, corn) and annuities
You’ll be able to grow your money better
This one is pretty obvious. Unfortunately, not everyone can grow their money through investing.
You might heard that one of your neighbors earned a lot of money because he’s a real estate investor, or your co-worker getting himself a new car because a company’s stock that he invested on a while back is now a global brand.
That’s great, right?
Now, don’t get ahead of yourself. You should be aware that there are still people who lose a great amount of money because of some boneheaded decision that they made themselves. The good thing is losing your invested money is something you can still avoid.
Not by not investing, but through…
…Listening. Studying. Thinking. Before making an investment decision.
You may learn valuable lessons that can only be attained by investing your own money
Ever heard of the old cliché, “Experience is the best teacher.”?
Well, I just think that you can easily relate that to several things in this world, and one of them is to investing. It’s because to be good at investing, you need to start first, and get the experience needed to become a great investor.
You shouldn’t also be afraid to try new things or make mistake while you invest, because like what Albert Einstein said before…
“Anyone who has never made a mistake has never tried anything new.”
You should learn from your mistakes, and avoid making them again. Do that, and I bet that you’ll become good at things that you want to be good at easily.
You can enjoy the magical power of compounding interest
What is compounding interest?
It’s just one of the nice benefits that you can get when you invest. To give you a nicer meaning of compounding interest here is great piece that I found from Erin of BrokeMillennial.com.
“Compound interest is proof of the proverb money begets money. With compound interest, your money will earn interest on the interest already accumulated.
Now, there is a popular belief that people who start young are the only ones who can enjoy the power of compounding interest. Well, it’s not really 100% accurate because even if you start late in your 30s or 40s or even in your 50s, you can still make use of it for as long as you reinvest your earnings, and you do it for at least a good number of years.
Here’s another great statement that an intelligent man once said about compounding interest.
“Compound interest is the eighth wonder of the world. He who understands it…earns it…he who doesn’t..pays it.”
Who said that?
Albert Einstein. Again.
If you didn’t know the answer to that, it’s either you’re not really that into investing yet, or you didn’t have any idea that Albert Einstein used to be an investor too.
You may retire comfortably
Lastly, investing can help you achieve your dream retirement. Once you get used to investing, and be able build the right portfolio, there’s now a higher chance that you’ll make money and get to retire comfortably.
Here’s a good guide that I got from J. Money of BudgetsareSexy.com that you can follow and to determine yourself when’s the right time you can retire.
You can retire safely when you have 25x your annual expenses invested in income generating assets (which assumes a 4% withdrawal rate annually from these investments to live on —another general rule people tend to agree on).
Those are just “some” of the benefits that you can enjoy when you invest. I’m sure you’ll be able to know more once you try it out yourself.
Just keep in mind that investing can be like marriage. There can be good times and bad times. You will never know what will happen until it happens, right?
The only thing you are certain is that one will surely come after the other.
Now, are you an investor? What other benefits of investing have you enjoyed lately?
Other articles about “INVESTING” that you should be reading:
- Five Types of Investors – Which Group Do You Belong?
- Exchange Traded Funds: What Are These ETFs?
- 10 Steps To Improve Your Finance This Year
Photo Credit: David Ohmer