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Why Are We Serious About Investing, and Why Should You?

Indeed, money doesn’t necessarily buy happiness, but it greatly influences it. Financial security, the peace of mind knowing you have enough for the future, directly impacts the quality of life. Investing is not just about growing wealth; it’s about ensuring financial stability and securing a comfortable future. It’s about making informed decisions today to reap the benefits tomorrow. This is why financial education and understanding investment principles are so essential for everyone. Here are some thoughts to ponder. 

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Reasons why many people don't invest

People often hesitate to invest due to a mix of psychological, knowledge-based, and perception-related reasons. A significant factor is the fear of losing money, as many people have a stronger aversion to loss than the desire for gain. This leads to a tendency to ‘play it safe’ with finances, preferring savings over investments, despite the potential for higher returns from investments in the long run. 

  • Lack of knowledge
  • Scared of making mistakes & risks
  • Bad experiences
  • I don't want to commit
  • I got no time

What you are risking by not investing​

By choosing not to invest, you’re essentially missing out on the potential for significant financial growth over time. This loss is not just about the immediate returns you might forego but also the compounded growth your money could have earned. For example, small, regular investments can accumulate into a much larger sum over a period like 25 years due to the power of compound interest and the higher average returns offered by the stock market and other investment instruments compared to traditional savings accounts. 

By not investing, you are automatically losing money due to inflation. Here’s an example: The price of coffee in the United States has significantly increased due to inflation. In 1967, a pound of coffee cost $2.83, but by 2023, the price had risen to $25.22. 

It's riskier not to do anything with your money because either way, its value decreases due to inflation. Give your money a fighting chance.

This is particularly important in the context of long-term financial planning and retirement. Investing can help bridge the gap between your retirement needs and your available funds.

Traditional pension plans are becoming less common, and social security often doesn’t cover all retirement expenses.

Relying solely on a single income, especially without the cushion of investments, can be likened to walking a financial tightrope without a safety net. It stifles your ability to build wealth and restricts financial freedom, making long-term goals like retirement a daunting challenge. In a world where financial stability is not guaranteed, failing to diversify income sources through investments means missing out on the crucial opportunity to have your money work for you, amplifying your financial security and growth potential.

Choosing not to invest binds you in a perpetual cycle of trading precious time for money, leaving you vulnerable to economic shifts and personal circumstances.

Final Thoughts:

Investing can seem intimidating, but it’s really about taking control of your financial future. It’s not just for the wealthy or the experts. Think of it as planting seeds for your future financial health. Yes, markets fluctuate in any type of investments, but with a long-term view, patience, and financial literacy, you can navigate these waters. Starting small is okay. The key is to start. Over time, you learn, grow, and your confidence builds. Investing isn’t just about making money; it’s about securing a more stable, financially sound future for yourself. Here are a few steps you can start today towards investing for your future. 

  • Educate yourself about investing. Learn about their ineherent risks and rewards
  • Surround yourself with the right people who can provide you valuable insights about wealth building
  • Start building your investment fund & do it consistently
  • Choose investments that fit your lifestyle and risk profile
  • Be patient. Compounding usually takes time, but it's worth it.

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