If you have a nice amount of money saved up, investing can be an attractive way to get more returns. To make the choice a little easier, we will discuss why investing is a smart choice. Now this is also subjective – like in a previous article the importance is to get started whether you have alot or a little bit. JUST GET GOING…ONE STEP AT A TIME. Let’s not be having this conversation again next year.
ADVANTAGES OF INVESTING
Investing is a smart way to make more returns on your assets. Therefore, in this article, we will start by naming the benefits of investing.
1. Higher return
The biggest advantage – and therefore the most important reason to start investing – is the higher return that can be achieved.
This becomes particularly clear when we compare the return of, for example, profile funds with the interest rate on savings. The savings rate, for example, is currently between 0% and 1% and there is no prospect of this increasing.
On the other hand, in 2019 an average return of 12.7% was achieved by investing in profile funds. This difference is so large that investing is becoming increasingly attractive compared to saving.
2. Passive income
Another advantage of investing is that it generates income in a passive way. In fact, you earn money without really doing anything for it, at least if you outsource the investing. This is interesting for many people to build up a pot for their old age or to build up assets outside of your normal income.
3. Return-on-yield effect
The return-on-yield effect occurs when you invest your assets for a longer period of time. The return you earn on your invested capital can be reinvested later.
This means that in the longer term you will receive a return on your investment. This creates a snowball effect that ensures that your assets increase exponentially. As they sometimes say, money makes money, and that is exactly what happens with the return-on-return effect.
4. Your wealth is always available
Assets in a savings account are usually considered more liquid than assets that are invested. Yet this is a misconception because you can sell your investment products at any time. So you can access your assets at all times.
Not being able to access your money when you need it unexpectedly is therefore not necessarily a disadvantage of investing. Of course, your investment is more successful if you hold it for a longer period, but in case of an emergency you can always free up your assets.
5. Interest
Finally, investing is also a lot more exciting and fun than simply putting your money in a savings account. Are you interested in the financial world and do you like to keep an eye on the prices? Then investing can certainly become a hobby, one in which you can immensely deepen and develop yourself.
Of course, investing is risky. However – everything is. Nobody could have ever predicted 500 million jobs would be lost due to a virus. So, why not take a leap of faith and just do it? I know you want it… You know you want to… Let’s go…