Saving money is a good start in achieving your financial goals in life but investing can speed it up when done right. Imagine your financial goal like a destination you would want to go like Boracay for example. Yes, taking a boat, i.e. saving, can take you there but taking the plane, i.e. investing, will take you there faster. That’s basically what investing is, bringing you to your destination faster and efficiently.
Top 6 Reasons to Start Investing Today!
You might be asking why you must invest your money when you can have all of it in a safe place called a bank. But being safe is not always a good thing and risk is not always a bad thing especially with money matters.
Here are the top 6 reasons to start investing your money:
1. Make Your Money Grow
Well, saving is good but if you want to make it grow then invest it. If you have a savings account it may only earn around 0.25% to 0.5% per annum. This means that if you have a Php 100k in your account then in a year you can only earn Php 250 less tax. If you invest it in a mutual fund or UITF then you can enjoy higher interest rates, though not guaranteed but highly possible, an interest of around 10% p.a. is something you’ll never get in your savings account.
2. Famous People are Doing it Too
Do you know Bo Sanchez, Marvin Agustin, Oprah Winfrey, and Lebron James? They are successful in their chosen field but still, they make the most out of their money thru investing. If they’re doing it then why not do what the successful people do. Invest your money and let it grow.
3. Beat Inflation
Train law has affected the prices of goods and services in our country. But don’t you think that inflation is not new to us. In fact, inflation is part of every growing economy and you can never get away from it but you can do something to lessen its impact and it’s called investing. You can only beat inflation by enjoying an interest rate equal to or greater than the inflation rate.
4. Earn Higher Interest Rates
You might be thinking that banks too give a higher interest rate like above the 0.25% mark. Yes, that’s true but you must also be aware that you need millions of pesos before you can enjoy the higher rates. When you invest it you can enjoy those rates even with just a few thousands.
5. Enjoy Compounding Interest
Financial experts call compounding interest as the eighth wonder of the world. This can be your greatest friend if you know how it works. It can make your money double the amount in a shorter span of time. Like you can make your Php 5o0k to Php 1M earning 10% p.a. in 7 years.
6. Reach Financial Goals
Finally, you can achieve your goals in life. Sometimes you have things that you would want to pursue but your current financial obligation is not letting you. By removing money out of the equation then that’s the time you can truly enjoy life.
Brian Tracy once said that you should not let your comfort zone to become your prison. All the while you know that saving money is all you need to have a comfortable life.
But little did you know that there are options for you that you can take to achieve it faster. You just need to equip yourself with the right knowledge that will mitigate the risks.
Because investing can be safe too when you study it well. Don’t worry, there are several resources out there that can help you with it. Happy investing!
Federico is an electronics engineer, financial blogger, insurance agent, and a certified investment solicitor. A multi-awarded Sun Life financial advisor with clients ranging from lawyers, doctors, engineers, accountants, business owners, company directors, and OFWs to minimum wage earners had sought advice from him in achieving lifetime financial freedom.