A young Capital Region resident wondered recently why he should invest his money. He has a large amount of money sitting in a bank savings account and he’s not happy with the rate of return.
Why don’t any of his friends and family invest? Basically, because we are not taught how money works.
One of the most compelling reasons for you to invest is the prospect of not having to work your entire life! Bottom line, there are only two ways to make money: by working and/or by having your assets work for you.
If you keep your money in your back pocket instead of investing it, your money doesn’t work for you and you will never have more money than what you save. By investing your money, you are getting your money to generate more money by earning interest on what you put away or by buying and selling assets that increase in value.
And guess what? If you have your money in a savings account, it’s being investing–by the bank and not on your behalf. The profits generated, on your money, go to the bank, which gives you a bare minimum 1 per cent return (most often less).
It really doesn’t matter how you do it. Whether you invest in stocks, bonds, mutual funds, options and futures, precious metals, real estate, your own small business, or any combination thereof, the objective is the same: to make investments that will generate more cash for you in the future.
As they say, “Money isn’t everything, but happiness alone can’t keep out the rain.”
Or, “Money doesn’t buy happiness, but just try living without it.”
Whether your goal is to send your kids to college or to retire on a yacht in the Mediterranean, investing is essential to getting you where you want to be.
Dave Balog teaches money basics for families and individuals in the Capital Region. email@example.com. 952-1257.