Should You Start Investing?

Whenever we find our self in a financial crunch the first thing that comes to our mind is to start saving more or rather try to start saving more. I am sure you must have been in this situation many a time in your life till now but does this really helped you? were you able to save some extra money and come out of that crunch? Well, aren't these are the times you wished you had made some investments before? Now, if you’re already trying to manage a budget and pay down debt, you might wonder why you have to add another financial task of investing to your to-do list. But this one might be the most important of all. Investing is essential to good money management because it ensures both present and future financial security. Not only do you end up with more money in the bank, but you also end up with another income stream. Investing is the only way to achieve both growing wealth and passive income.

What is investing?

Simply, Speaking investment is anything that puts money in your pocket. It can be anything that provides a capital appreciation or a regular inflow of cash. Technically, anything that generates a return is an “investment”. This means even your savings account generating 1% interest is an “investment”,  The property getting you a fixed rental income is an investment, the loan you gave to your friend in consideration of a fixed monthly interest is an investment, the small business you are running part-time for generating an additional stream of income is an investment.
However, when most people talk about investing, they are referring to higher return investments like mutual funds, ETFs, and stocks etc.

Why is investing Important?

Investing ensures present and future long-term financial security. The money generated from your investments can provide financial security and income.  Because many investments pay monthly, quarterly, or annual distributions, you can enjoy a passive income that ultimately could replace your paycheque. If you want to retire or become financially independent, investing is the way to do it.
In order to build your wealth, you will want to invest your money. Investing allows you to put your money into vehicles that have the potential to earn strong rates of return. If you don’t invest, you are missing out on opportunities to increase your financial worth. Of course, you have the potential to lose your money in investments, but if you invest wisely, the potential to gain money is higher than if you never invest.

Investing your money can allow you to grow it. Most investment vehicles, such as stocks, certificates of deposit, or bonds, offer returns on your money over the long term. This return allows your money to build, creating wealth over time.
As you are working, you should be saving money for retirement. Put your retirement savings into a portfolio of investments, such as stocks, bonds, mutual funds, real estate, businesses, or precious metals. Then, at retirement age, you can live off funds earned from these investments.
Based on your personal tolerance of risk, you may want to consider being riskier at a younger age with your investments. Greater risk increases your chances of earning greater wealth. Becoming more conservative with your investments as you grow older can be wise, especially as you near retirement age.

Investing can help you reach big financial goals. If your money is earning a higher rate of return than a savings account, you will be earning more money both over the long term and within a faster period. This return on your investments can be used toward major financial goals, such as buying a home, buying a car, Starting your own business, going for a world tour or putting your children through college.