Why You Should Invest
You should invest because you can’t afford not to. Much like getting an education, investing is a key element in creating wealth. Investing is a way to make your money work for you. If you don’t make good investments, you money just sits there like dead-weight.
One of the primary reasons to invest is to stay ahead of inflation. Every year, prices for goods and services rise a little. This is perfectly normal and is known as inflation. (The computer industry is one major exception to this, as advancing technology drives prices for old technology down each year.) What this means is that your money is worth less and less each year. What you can buy for $100 this year may cost you $105 next year. This example would be a 5% inflation rate. Over time, inflation can eat away at your money, eventually making it worth much less than it was when you first earned it.
Investing is the way to keep ahead of inflation. If your investment can return at least as much as inflation, you won’t loose value of the principle balance. Any amount you earn above the rate of inflation is all the better. Which leads to the real reason you invest.
Building wealth is easiest to do by investing your money in such a way to make it grow over time. If you take a look at how most wealthy people get wealthy, you will find that they have made good investments. Getting a well paying job is certainly a good place to earn money, but if you don’t make those earnings grow after you’ve earned them, you will not be able to generate real wealth (unless you make $5,000 per hour or find a way to live to the age of 300).
When you invest, you are making your money work for you. Your money earns more money, even when you are free to do other things. I’ll use an extreme example to illustrate the point. If you were to be given a a million dollars and put it in even a modestly safe investment which returns 5% per year, that million dollars would “earn” you $50,000 per year, without you having to lift a finger. Not bad income, eh? It’s like having a second job, only without the commute or the boss.
Of course, the trick is getting that million dollars in the first place, but that’s where writing for Helium comes in!
If you are serious about building wealth, investing is not an option, it is a necessity. You must make your money work for you, not only to stay ahead of inflation, but also to build on what you already have. Pick your investments wisely, but be sure to invest in something, anything, that will serve your needs. You can’t afford not to.