Investing Demystified: Top 3 Reasons Why It Pays To Invest

Posted on Aug 2 2016 - 5:29am by Business Day TV

Novice InvestorForgive the pun in the title, but there is actually truth in it. The seemingly arcane process involved in investing deters many from giving it due attention. Some are even not convinced that it is essential. However, here are three solid reasons why everybody should consider investing.

  1. It gives the individual a chance to become financially independent. If you have not set aside an amount from your current income, you will probably end up working up to retirement age (and even beyond) just to survive. Frankly, savings alone do not cut it. When you retire, your goal should be to turn what money you set aside to something that you can use for your monthly spending. Investments can seem risky at first but, in the long run, will enable you to grow your wealth and build a better future.
  2. It has tax benefits. While you are working, you have to pay taxes. Depending on where you live, these taxes can be in the form of medical insurance, social security, income tax, and other local taxes. Long-term investments, however, can allow you to gain up to 20% on your initial investment.
  3. It beats inflation. It’s a fact of life: Prices rise every year. Let’s say that the average inflation rate is 3% per year. You have money in your savings account that gives 2% (at the most) interest every year. When you merely put your money in savings, you tend to lose a bit of your purchasing power annually. When you invest, however, you could receive 8% in your annual returns and gives you a chance to beat yearly inflation by at least 5%.
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You don’t need to throw in the towel if this all still sounds very complicated. If you are a novice in the field of investing, it’s not too late to learn the basics. There are numerous resources online as well as investment courses in Singapore offered by established and renowned resource persons. These resources will provide you with comprehensive knowledge about investing and how to have a worry-free financial portfolio that will serve you well now and into the future.