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.