Why you should start investing?

Investing money is very important because it is becoming very hard to earn enough income to cover future and current expenses through employment income source bank life savings.

Today’s job market is highly competitive. Even if you have a good degree from a reputed university its no longer guarantees your employment security,  many job applicants who are younger than you may have higher skills and qualifications than you and that will make you a backdated employee of a company. Working for hours in the office also no longer guarantees your promotion because almost everyone else is working as hard as you and even younger employees will do much better than you at some point. Such a tough competition prevents you from enjoying high salary and promotion at your workplace

 The cost of living is increasing every day in many developed countries around the world. Housing prices also increased a lot in the last 10 years. At the same time, banks aren’t paying enough interest anymore so you can’t earn enough from your bank savings too.

Investing is a good alternative for you because it requires a lot less labor & gives you enough returns in a short period of time. Although doing investments would require a serious amount of money if you want less labor and more returns.

The old theory of working hard and save money no longer works in today’s generation, so if you can save enough money for investing and start investing you can earn almost 10-15% a year or more than that which can secure your financial future easily.

Why you should choose the stock market for investing money?

After saving enough money to start an investment, you will have lots of other options where you can invest your money but there are a few reasons why you should choose the stock market.

1) To grow your money within enough time

Your money is losing value every day because of Inflation, what does that mean? remember when you were a teenager what was the price of common goods and services and what it is now. It has increased a lot in the last 10 years but the amount of money you are getting paid through your job has not increased that much in the same period of time.

For example, 1$ worth of milk became 1.47$ within 1997-2019 that’s a 47% increase in price so if you have 1$ savings from 1997 you will get 47% less milk in 2019 with that amount of money. This is just one example, purchasing power is decreasing rapidly every year so you should look for investments that can grow your money faster than the inflation rate. If you do proper research on the stock market and invest then you can get as high as 10-15% per year profit out of it, which is pretty decent if you want to secure your financial future.

2) Stock markets can give much better & secure returns than other markets

If you look at the history stock market has given more wealth than to investors than any other investments like buying treasury bills, bonds, etc.

For example, looks at this chart, this shows how much money you would have if you invested just 1$ into large stocks, small stocks, government bonds, or treasury bills since 1926.

Why You Should Invest In Stocks

3) Stock market investments can save your tax

You can invest in lots of tax saving mutual funds or ETFs to legally avoid paying high income-tax. Saving tax can make a huge difference in the profit you get overtime from your investments.

4) Invest in stocks to be a part of your favorite company

If you think companies like apple, google, Facebook is very good tech giants and you want to be a part of their profit you can buy their company and be a part of their profit

5) Get a steady income from dividend

Dividend stocks can pay you money every day, a dividend stock can pay you from 1-10% or more each year.

For example, let’s say you buy a 100000$ worth of dividend stock which is paying you 4% of your total investment. You will get paid 4000$ each year for holding that stock.

 

Legendary investor Warren Buffet said:

“If you don’t find a way to make money while you sleep, you will work until you die.”

Shashi (Prachi)

Shashi (Prachi)

Smile it let your teeth breath Equity Research Analyst at HDFC Mutual Fund ll Portfolio Management ll Wealth Management ll CFA Level 1 Candidate

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