Wednesday, January 16, 2008

THE REASONS - WHY INVEST YOUR MONEY?

Why you invest your money? A simple question, but your reasons why can vary from paying for college, financial security, starting a family, buying a home, large future expense, changing jobs, building wealth, or retirement. Whatever your financial goals are there are two really great reasons why you should start investing your hard-earned money as soon as possible.

Reason #1 -
The cost of products and services such as housing, education, retirement, transportation and medical keeps increasing.

These increases have been continuously outpacing the average savings rate forcing people to invest for higher returns besides saving money in a bank account. Those who don't invest fall even farther behind every year that goes by. Note: A typical savings accounts barely keep up with inflation and can result in very small returns of less than 1% after factoring in the inflation rate.

Reason #2 -
Time can be your best friend or your worst enemy.

If you start investing early time is on your side. If you procrastinate, time becomes an unavoidable enemy of compounding your money and can dramatically effect your outcome.

What you have to do if you start investing and want to retire at 65 with one million dollars? Let's run through some examples by saying you started investing at some different timeframe's in your life 25, 35, 45 and 55. Along with the starting age the average yearly return is another important variable. The different yearly returns that we were able to get an 8%, 10% or 12% return on your investments per year.

Reason #3 -
Your wealth not only be measured by equities, but depend on your ability to generate positive cash inflows.

I think you don't like idle money, if you have a little freedom of your financial (money). Increase your wealth by the investment that possible to create cash inflow. Do not invest your money in bad business sector which result negative cash inflows.

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