Investing is the act of committing money in an investment vehicle today with the expectation of obtaining income in future together with an increase in the value of your investment. In other words, you put your money to work for you instead of working hard for your money.
Most people are aware that investing is the key to changing their financial circumstances but don’t know where to start.
People who are not satisfied with their current financial situation will either want to:
-
Purchase their dream home
-
Plan for an expensive wedding
-
Pay for their children’s education
-
Go on luxurious holidays or simply
-
Retire early
Why is investing important?
Inflation, the increase in the price of a basket of goods or services, usually erodes the purchasing power of your money. Investing helps your money grow faster than inflation. If you do nothing with your money, the purchasing power of your dollars are diminished each year. Investments grow your money in two ways:
-
By paying you an income in the form of dividends or rental income or
-
By increasing in value over time
Why invest?
Many people invest so that they can get more money. But investing gives you more than just money. Not having to worry about money or a pay cheque gives people choices. They have the choice of:
-
What to do with their time
-
Whether to work part time, full time or not at all
-
Freedom and financial security or
-
Contributing to their family or the community