Investing in Stock Market :Even though sometimes it gets us scratching our heads and scaring the crap out of our guts, financial growth is literally something that everyone is after. Whether you work for the federal government, a private company or you’re self-employed, chances are higher that you’re continuously looking for ways to multiply your income.
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While some people consider long-term savings and certain investments, there are many reasons why the stock market is one of the best places to invest your money in.
Of course, achieving financial freedom doesn’t come easy. It requires you to put in a substantial amount of work, like paying your debts on time, set money aside for a rainy day, consider the best-paying investments, and even learn about life insurance that will take care of you and your family when you’re gone.
Here are some reasons to consider investing in stock market to increase financial growth.
1. Huge potential to grow your wealth
Statistical research has for the longest time shown that stocks are one of the best ways to grow wealth. Of course, it doesn’t come without certain risks, especially considering how the stock market can sometimes be volatile and unpredictable. However, the reliability of investing in the stock has been proven for almost over the past century.
In the US, for instance, according to the S&P 500, stocks have been shown to have a 10% annual growth potential since 1926. Compared to bonds and other short term investments, the stock market comes out as a winner when it comes to investing long-term despite the periodic up-curves and down-curves that can be experienced along the way.
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2. You can beat inflation
Inflation is arguably the biggest threat to long term savings and financial freedom. Inflation can basically be described as the gradual increase in the prices of goods and service, which ends up affecting the value of money. According to experienced economic analyst and business strategist, Kimberly Amadeo, the current rate of inflation in the US stands at 1.9% and is expected to rise.
What this means is that if you’re having some money lying in a savings account, it stands a higher risk of losing value. In other words, its purchasing power can reduce relatively. What $20 could buy you back in the year 2000 is obviously much more compared to what the $20 bucks of today could buy. On the other hand, the good thing about investing in the stock market is that stocks have a natural way to beat or keep abreast with the rate of inflation.
Additionally, you can easily outlive your retirement savings. While some certificate of deposit products may earn you a higher interest rate than your country’s inflation rate, the term of the CD fund is also a major catch. In some case, you cannot withdraw the money until the maturity period, which can range anywhere between 30 days and 10 years. In case you need urgent access to such an amount, you will be forced to pay the early withdrawal penalties or even forego a certain amount of the interests earned.
3. You don’t have to go all into
As earlier mentioned, there are many factors surrounding financial growth. For instance, it involves planning, analyzing risks, setting a time frame for certain obligations and investments, and even assessing your financial situation, among other things. Nonetheless, diversity is one of the best ways to approach it. When it comes to stocks and other kinds of investments, it is always said that you shouldn’t put all your eggs in one basket.
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Fortunately, the stock market offers a wide variety of options to consider. You can even spare a few bucks daily and concentrate the monthly total to put it in stocks. Also, you can buy stocks from different companies or industries in the economy that seem more stable and more profitable. The opportunities are endless and you don’t have to put everything in there to increase your financial growth.
4. You can always buy or sell
The other great thing about stocks is there’s no lock-in period. You can always decide to sell the stocks you have or hold onto it as much as you like regardless of when you purchased it. In most cases, however, some companies have a specific time frame when they put their stocks for sale or up for grubs. As a matter of fact, it’s just part and parcel of the stock investment ‘business’.
And there you have it! You have more than just a few reasons to consider investing in stocks. If you’re a short-term investor, there are many stock investment resources online that can help you make the right calls. In summary, though, the stock market can be a great place to put your money for long-term financial growth.
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