A good question that many of us should be asking is whether we should be investing in stocks now. There are compelling reasons to do either, so here are a few of them.
2 reasons to invest later
There really isn’t a whole lot of reason not to start investing for your future now. You cannot be too young, and few of us are too old. The younger you are, the more wealth you can create. If you only lose $ 1,000 at age 15, for example, and the average annual growth rate is 8% for 50 years, up to age 65, you’ll end up with almost $ 47,000 – on a single investment of $ 1000. Meanwhile, even if you’re 55 and hope to retire at 60 or 65, you have five to 10 years to invest in. By investing, say, $ 10,000 a year for five years and earning 8%, you’ll end up with $ 63,359 that’s pretty significant and useful.
Don’t think that you can’t invest now because you just don’t have the money either. Yes, a lot of people are so financially limited that they just can’t get it right now. But many of us have ways at our disposal to save more money and spend less money.
Still there are some good reasons to invest later. For example:
1. You are in debt
If you have high interest rate debt like credit cards, you should be investing on the back burner – but don’t stop there. Take steps to get out of debt as soon as possible, as this can be very financially debilitating. Imagine, for example, that you owe $ 20,000, as a lot of people do, and you’re charged an annual interest rate of 20%. 100, like many people. This will make you fork over $ 4000 every year – and it’s just for the sake of it. Note that low interest debt, like a mortgage, is much less of a problem.
2. You don’t have emergency funds
Next, if you don’t have at least three months of living expenses in an emergency fund, focus on building that fund instead of investing. Job losses and health problems can happen at any time, and they can be disastrous if we are not able to cope for a while. Make sure you cover enough funds to cover all necessary living expenses, including food, shelter, utilities, transportation, insurance, etc.
4 reasons to invest now
If you have a well-stocked emergency fund, are free from high-interest debt, and have a few extra dollars, there are plenty of reasons to start investing – ideally one that has the greatest potential for growth.
1. Build a retirement nest egg
Unless you are independently wealthy, you probably need to raise money for retirement – and invest it effectively. Don’t assume that much of what you’ll need will come from Social Security, because it probably won’t: the average monthly Social Security retirement benefit was recently $ 1,517 – around $ 18,200 for the year. Most of us have to build nesting eggs that will provide sources of income in retirement, and the sooner we start this process, the more likely we will accumulate.
2. Have a chance to retire early
If you are in decent form for retirement savings, you could do even better by saving and investing more, from now on. If you invest more aggressively, you may be able to really improve your retirement – either by ending up with more money and / or being able to retire earlier than expected.
3. Live a better life
Starting to save and invest now can also improve your life today. Depending on how you do it, you may end up with a sizable retirement nest egg long before you retire, at which point you can start directing more dollars towards other purposes, such as a more enjoyable vacation, perhaps travel. in Europe or Asia; nicer personal items, such as a luxury big-screen TV; and / or a nicer home, by moving or renovating your current home. You can just start eating more often or join a better local gym.
4. Improve the lives of your loved ones
Finally, by saving and investing now, you can improve the lives of those around you. For starters, you can set an example for your children, by watching yourself study companies or funds, invest in them, and maybe even review the performance of your investments together. You can discuss businesses together and help them get used to seeing the businesses around them as possible investments that can provide them with a secure future.
If you save and invest as much as possible and are efficient at it, you may also be able to support your children and maybe even your parents when they need a little help. If you end up having accumulated more money than you actually need, you may end up leaving a good chunk of change with your loved ones.
If you can, take a few steps now to start (or continue) investing for your future. Leave nothing to chance.