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Why Investment Is Important: 9 Compelling Reasons to Buy Stocks

Estimated reading time: 4 mins

There are plenty of things vying for your cash. That new car or maybe a new outfit is calling your name.

If you don’t understand why investment is important, you may allow years to slip away before you start putting cash into your investment accounts. Or you may be like some other people that go their entire lives without investing.

Continue reading this article to learn reasons why you should invest money in stocks to give yourself the motivation to get started.

Learning Why Investment Is Important

If stocks are a confusing subject for you, it’s no wonder that you aren’t putting your money into things you don’t understand. If you think investing in stocks is like playing the lottery or gambling in Vegas, it’s no wonder why you’ve run away.

Let’s dispell those myths and as we continue through this article and help you see how it works and why you should allocate some of your cash here.

1. Great Potential for Growth

If you are tired of looking at your cash doing nothing as it sits in low-interest bearing accounts then stocks are a great place for you to put your money. Depending on the stocks you invest in and how they perform, you stand to earn a pretty penny.

2. Time Is on Your Side

Investing in stocks should be a long-term game. If you’re nearing retirement — you shouldn’t put your money in risky investments.

You should go into investing in stocks knowing that it is a risky investment. Depending on where you have your money, it could be riskier than others. As a general rule, the younger you are, the riskier you can go without worrying about doing long-term damage to your retirement.

3. Asset Allocation

You’ve likely heard the term asset allocation more times than not. If you want to be smart with your money, you won’t put all of your eggs in one basket. You’ll allocate your assets in a wise way so if something goes wrong in one area, you won’t be totally out of the running.

4. Learn to Adult

Part of adulting is taking care of your finances. If you want to feel like an adult then invest in the stock market.

Not only will you feel like an adult but you’ll learn about different companies and may become a bit of a business wiz. Both of these things can be helpful in your business, work and other areas of your life so it’s a win-win.

5. You Have too Much Cash on Hand

If you have too much cash lying around, you may feel like it could be going to much better use — and you’re right! Instead of putting your cash under your mattress or in your wallet, it’s time to put it in the stock market and see how you can put it to work.

6. Your Favorite Company is On the Market

If you’ve always dreamed of having a piece of a certain company that’s a great reason to invest. If you love a company, use their products and do a lot of business with them, it can make you feel great when you own a piece of the pie.

Most of your favorite companies are public and you can buy a small piece of the company or you can work to gain a bigger stake where you’ll actually have a say in decisions the company makes.

7. Saving for Retirement

If you don’t want to work for money until the day you die then using stocks to save for retirement is a great idea. Simply putting money into a low-interest bearing savings account isn’t likely to get you to the saving goals that you want to be at by the time you get to retirement age.

You should also note that the state of retirement in the US looks bleak and you can’t be sure what is going to be in place for your retirement when you do get there.

8. Saving for Your Children’s College Fund

We all want our kids to get a good education but saving one dollar at a time without help from the stock market can be grueling. Find investments that fit your risk tolerance and get to work on that college fund.

9. Not Working for Money is Fun

Have you ever thought about making money while you sleep? The good news is that it is very possible and people are doing it every day all day.

Many of those people invest in stocks and enjoying delicious dividends. Not worrying about money is a lot of fun and the stock market is a great way to do that if you don’t have your own business and other leverage.

What to Avoid When Investing

When you’re investing, make sure you don’t stay out of the game too long. If year after year is creeping by and you aren’t investing in stocks, you’re missing out on valuable time that you could be compounding interest.

Make sure you think about investing for the long-term and don’t pull your money out if you see a little loss in your account. If you pull your money out when the market goes down, you will lose money instead of gaining money.

Increasing Your Business IQ

Now that you know more about why investment is important, why stop learning there? We have articles on business and other topics that can help you increase your quality of life.

Navigate through our site to find your favorite sections, drop a bookmark and come back soon for more great reads.

 

About the author /


Simon is a creative and passionate business leader dedicated to having fun in the pursuit of high performance and personal development. He is co-founder of Applied Change, a Business Change consultancy based in the UK. Simon is also an Ambassador for Gloucestershire business. Simon is an Associate Member of the Chartered Institute of Professional Development.

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