Managing Partner, AL Yam International Commercial Brokers
Investing is the most reliable way to attain your financial goals. It’s the gateway to financial discipline and independence. As a general rule, most people set aside a portion of their income as savings each month. But little do they know that, unfortunately, the saved money is unlikely to parallel inflation curves or increase in value. However, when you invest, you are putting your money to work, even when you’re not working. This is why successful businesses or people often make successful investments, aside from their inflow of profit or income.
Bluntly stated, the risk is a part of the investing game. A wrong investment choice could cost you a fortune and leave your investment underwater, which no one really wants. But when you examine the dynamics of the economy, educate yourself on market trends, and make strategic decisions based on this learning, you’re bringing ballast to the game. To avoid pitfalls, identify your financial goals, interests, and risk tolerance level to create a strategy that scrutinizes the market thoroughly. Make good use of the indicators that provide insights into the market and give you an idea of what works and what doesn’t. Remember, a good investment is the one that fits your goals and grows in value.
Be very aware that the risk of not investing outranks the risk associated with investing. You may believe you are in a secure zone when you amass your savings in a savings account, expecting that a few years down the line, you’ll have saved a huge sum of money to cater for future plans. But the truth is quite different.
Every single year you retain your money stagnantly, you’re robbing the opportunity for your money to grow. Inflation is creeping up steadily each year by 2% -3%, relatively higher than the earnings you may get from your bank. Though it doesn’t seem much, it can account for a considerable loss in the long run. And, sooner than you realize, your money will lose its purchasing power and eventually its value. While on the other hand, your money is worth more tomorrow if it grows more than the inflation rate. Hence, small and dedicated investments with a strategized plan can compound into substantial wealth.
Inflation is creeping up steadily each year by 2% -3%, relatively higher than the earnings you may get from your bank
Make it work
Investing is an effective way to put your money to work and potentially build wealth. Smart investing may allow your money to outpace inflation and increase in value. The greater growth potential of investing is primarily due to the power of compounding and the risk-return tradeoff.
Running a profitable investment allows you
to save for yourself. Plus, you can make your savings accessible to future generations. There’s also no minimum withdrawal limit. And that is a win in itself.
Being an investor allows you to follow up on your business for as long as you want, even when you are eighty years old.
Accept the challenges so that you can feel the exhilaration of victory. Think big, act small, but start NOW. Don’t wait for opportunities; create them.
On a final note
One investment strategy does not fit all and may vary from those of your family and friends. Therefore, before you choose this path, do your homework, consider your goals and financial situation, and learn how to invest – as well as about the risks involved! You don’t need lump sum money to start your investing journey. Start small by setting aside a little money each month. If you’re a fresher in the investment arena, then you’re more likely confused about where to put your money. Get in touch with a reputable financial planner or an advisor to guide you.
Nevertheless, be ready to expect the unexpected in the coming decade.
