For those who understand investing, the ‘why’ seems obvious. You invest in order to increase your profits, oftentimes in a passive manner. Sounds nice right? The problem is many don’t understand the nuances of investing, so they write the whole thing off altogether. Don’t do that because once you understand the varied investment opportunities and the simple way in which it can work, you will realize what a no-brainer investing actually is.
Investing is an expression of ownership. From the earliest days of corporate equity and the first glimmers of capitalism, the dream shared by all ambitious men and women has been to own the fruits of their labor. That is what investing offers. In the simplest terms as described by Bridget Casey, “Investing means to put forth an amount of something with the expectation that it will generate a return in the future. You will hear people talk about investing their time or effort, and of course, money. When you invest your money, it means that instead of spending it you are putting it in some sort of vehicle that will use it to make more money.”
In much the same way you put money in a savings account, with investing, you tend to accept more risk for more rewards. Savings accounts garner consistent interest, but the margins tend to be relatively small. Investing is the opposite. You can make rapid profits, but you also run greater risk of losing money as well. That’s where research and expert help comes in, especially when starting out.
The stock market tends to be the most common approach to investing, but in reality there are tons of way to invest your money in order to increase a profit margin like real estate or cryptocurrency. You have to consider what approach works for you and your lifestyle. If you want to invest, but don’t have time to commit to research or diligence, then you may opt into an REIT, or adopt an investment approach through a firm.
The ultimate purpose of investment is to create wealth for the investor, but there is more to it than that. Investing is a reward for those who take the risks and a reward for those who reap the benefits of progress and productive enterprise. While it is true investors can make a lot of money, it is also true they provide the means by which nations grow and prosper. In that way, investing is simply the creation and distribution of wealth. In summary, the answer to why you should invest is simple. As AllBusiness describes, “Investing allows you to put your money in vehicles that have the potential to earn strong rates of return. If you don’t invest, you are missing out on opportunities to increase your financial worth. Of course, you have the potential to lose your money in investments, but if you invest wisely, the potential to gain money is higher than if you never invest.”