Everyone talks about investing – how great it is, how beneficial it is, how it can help accumulate wealth with just a few hundred or a few thousand dollars.
What is the importance of investing?
How does putting in a little amount to so much as the years go by?
Let’s find out.
The Importance of Investing
Why is investing so important?
Simply put, investing is the best way to make your own money work for you. This generally means that you can use your own money to build wealth.
The way this is done is through compound interest. What is compound interest?
Compound interest is when an investment generates earnings or dividends and then is reinvested. Basically, they generate their own earnings from the previous earnings.
If you want to check just how much compound interest you could acquire, check out the Compound Interest Calculator.
Play around with some different calculations, but just to see how much money you could make, start with this option:
Let’s say you decide to invest $10,000
And you intend to save for 50 years
The annual interest rate is usually 10% (based on the S&P)
At the end of that 50 years, you would’ve made over $1.1 million dollars.
And depending on your age, that could mean that you retire early or retire with enough money to not worry about expenses.
That’s why investing is so crucial.
So how do you start investing?
How to Invest and Where to Invest
The great thing about investments is that you can put money in a variety of different forms. A few things you can put your investments in:
If you’re just getting started in investing, the best thing to do is to invest in things like stocks or bonds and if you have the money, cryptocurrency.
There are a number of different investing platforms that allow you to invest in one or many different options. Three of my picks are:
Both Interactive Brokers and Robin Hood are free to use and set up an account; Robin Hood is the best for beginners, with a variety of stocks and bonds you can choose to invest in.
Charles Schwab does pull your credit if you start to invest there, but you can receive points if you use the American Express Charles Schwab card.
When it comes to what you should invest in, here are some of the stocks I have in my own portfolio:
ARK Innovation (ARKK)
Grayscale Bitcoin Trust (GBTC) - Invest in this if you are interested in cryptocurrency and want to buy it on the stock exchange.
You can invest in these individually or if you’re using Robin Hood, they have the ability to group certain stocks together so you can put money in a number of different stocks.
The key to investing is ensuring that you’re putting money into that account, usually on a monthly basis.
You don’t want to pull out all of your money before it grows, though depending on the market, you should be able to get back to where you were before if you need to take out the money in an emergency.
Guys, that’s it on the importance of investing, how to get started, and where to invest.
If you’re interested in investing, especially when it comes to your business, or you’re wondering about business credit, then come and join the Credit Stacking to get started!