On average, a normal American household had about $ 175, 510 in total savings as of June 2018. This savings culture is poor when compared to the monthly income within most of these households. You may have a wide range of reasons why you do not save or invest, and they could be justified.
These reasons may range from financial responsibilities to harsh economic times. However, you may also need to consider a variety of reasons why you should invest. Investing can seem intimidating, but it’s a great way to watch your money grow.
Do you want your money to work for you? You may consider these nine reasons why you need to start investing now.
1. Your Future Financial Freedom is Not a Guarantee
With age, comes additional responsibilities and needs. However, even while these changes occur your financial freedom may be at stake. Your income will not always be constant or stable and this should be a present concern.
Imagine a scenario where due to the unfortunate circumstance you lost your income due to, incapacitation, or retrenchment. Your only hope would be your savings. Investing the little you make now can be your saving grace in the future when your financial freedom will be at stake.
2. Take Advantage of Your Current Financial Status
Making mistakes in your savings culture at this point does not matter. You have more years of wages and salaries in the future. Most people fear investments or saving because they fear the possibility of failure. But you have a long way ahead into your career or business.
At this point, the focus should not be on the returns. The focus should be on the rate of savings. The fact that you can manage your recurrent financial needs in the present means that you have a stable financial status.
Being fixated on a rainy day ten years from today will give you the motivation to enter into a saving culture.
3. Investment Early in Your Life Allows You to Take Risks
You may be wondering, should I invest now? Well, most people seek to find the best time to start investing. The best answer is yesterday.
The reality is that as soon as you have an active income, taking up the savings challenge and channeling your funds to a suitable investment should be immediate.
When you invest early, you have the liberty to take investments risks. The confidence to take up risks allows you the chance to explore the various investment options available. You can find a variety of investment options on the U.S stock market news, which can allow you to save early for the future.
4. Compound Interest
Money makes money over time. As long as you make an initial principal deposit in your savings, you have a guarantee that this sum will earn interest. You need to save because your savings will continuously earn interests on the initial deposit for as long as the principle is reinvested.
Compound interest makes saving worth it because it rewards you for your commitment to investing. Imagine sustaining a saving and investment culture in your entire active work life. The total compound interest earned over time ensures that you live a comfortable life after retirement or in case of loss of income.
5. The Future Economic Stability is Unknown
Revamping your savings and investment for the fear of the unknown may seem pessimistic, right? Well, economic downturns can ruin your business and mess your savings. During the recent recession, most people could not even pay their mortgages and other bills.
Sustaining a saving culture will ensure your economic stability if such an eventuality ever occurs. In case of an unexpected recession or economic downturn, you need a buffer that ensures that your life does not come to a halt. The need for that buffer is the reason you need to invest in stocks.
6. Borrowing Costs are Sky Rocketing
You certainly have dreams and aspiration for the future, right? Part of these dreams is to build a home. Whichever project may be in your mind, finding the capital to fund the outcome may be a complex process.
Borrowing money in the future to fund such dreams may be hard. This may be due to the high rates of interest charged on such facilities. The only solution in such a case would be to invest enough money over time that would enable you to undertake such projects without borrowing.
7. There Is Never a Benchmark for How Much and Why You Should Invest
Most Americans ask, “should I invest now”? Most times, this question is due to the feeling of inadequacy. The bad news is that as long as you feel inadequate you may never take the first step. The good news is that there is no limit on the much you can save.
This means that you can save as little as your income allows. With the right attitude, you can make significant investments over time.
Have you ever had a sudden emergency that needed an urgent intervention? Chances are you had to call a number of people to bail you out. This is what happens when you do not make investments that may be redeemable when the need arises.
If you ever wonder, “is an investment worth it?”, just think of the extent of relief that such investments may present in case of an emergency.
9. Saving and Investments Allow You Additional Luxuries
Do you have a dream getaway plan that seems impossible due to financial obligations? You are not alone. Many Americans desire a chance to take annual vacations and trips around the world.
But their financial muscle is inadequate. Having a stable saving culture can guarantee you additional luxuries. You can use your investment returns to spoil yourself ones in a while, which is rejuvenating in the long-term.
If You Are Wondering When and Why You Should Invest, the Answer Is Now, For Your Future
Now that have your answer on why you should invest it is time. It is never the right time to do anything. You simply need to start and remain focused on the goal.
You do not need to have a certain income level or specific rates of saving. All you need is consistency and foresight and you will be on the path towards financial freedom.
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