With years investing becomes more and more popular. We suppose there’re two main reasons for that:
- People are more conscious nowadays, and they want to be sure their future is safe;
- With such online trading apps like Orca investing becomes simple as never before. All you need is your smartphone and Internet connection.
But if you’re still asking yourself the question “Should I invest?”, then we’re here to tell you why investment is important.
The answer seems to be simple – growing your money. But why through investment? There may be other ways. Yes, may, but today we’re not speaking about them.
First of all, let’s make it clear that when one wants to generate income or preserve capital, they invest money. Investments can be financial (when you purchase securities) and real (investments in industry, construction, and so on).
And now go straight for the reasons for investment:
Be certain about your future
Life has an irreverent sense of humour, and bad happens when you expect it the least. Tsunami, pandemic, meteor lands on the bank with all your savings or even something inconceivable like dismissal from work. To save yourself in such cases, consider investing. But if you decide to invest, you should do it wisely. For instance, buy different assets: stocks, bonds, ETFs and many more. Smart scholars call this diversification.
If you start investing a little from your salary, you’ll be able to provide yourself with a financial cushion, and in case of anything, you’ll have enough money and as a result time to go through it.
Achieve your financial goals
Instead of dreaming of buying what you want, you can start investing. But set realistic goals. Let us clarify. Buying a yacht or flying to Mars with Elon Musk are not realistic goals, if you are an average investor. But earning for your retirement, or paying for children’s education, or traveling more is real.
How does it work?
The basic investing principle is to invest money and gain profit. You can achieve that either when stock’s price is rising, or when you get dividends from it.
Escape from inflation
Guys, inflation is a crappy thing. Prices rise, salaries don’t, and money loses its value. For example, you can put some money in a bank account, and in the long-term your money will lose its value, and profit from the interest rate won’t cover it. As banks keep low interest rates, roughly speaking in some years you will have less money than you’ve put in. Stock markets keep a higher interest rate as well as higher risks (obviously). Investments are the same financial instrument as deposits, and sometimes perhaps even better as in theory (precisely in theory) they can bring more profit than deposits.
Save for retirement
Folks, you are mature enough to know the truth. We all will get old eventually. Yeah, we know, it seems like it’s some kind of nonsense, but we’d never lie to you. Someday you will be sitting by the fire, reading a book and remembering adventures of your youth. No more parties.
To spend your retirement years in comfort you can start investing right now. Long-term investment is a great way for gaining money. Time plays on the investor. For example, you invest £1000 and get 10% per year. Next year you will get 10% from £1100 and so on. This creates a snowball effect.
Support your favourite companies
It’s not about your profit exactly, it’s more about supporting something you really like. Let’s say there’s a bakery chain in your city, and you’re madly in love with cinnamon buns they’re baking. And you decide to support your favourite bakery and invest money. They have more money, you eat more buns. You’re happy, they’re happy, everybody’s happy.
Push world’s economy further
The more you invest, the more there’re possibilities for businesses to develop. As a result there’s more money and the economy grows. At the same time, when you gain profit from your investments, you roughly speaking become more valuable for the society as a whole.
So, what now?
Is investing money a good idea? Well, it depends on many factors, and you have to decide for yourself. If investing wisely, in most of the times that could give you a lot of benefits, but there’re risks as well.
However if you decide to invest despite all the “buts”, and our reasons seem attractive to you, download the Orca app and try our set of investment tools, clear interface with tips and hints, ISA share dealing and many other useful features.
Orca does not provide investment advice. If you have any doubts, you should contact an investment adviser. Terms and conditions apply. Your capital is at risk.
Orca is an appointed representative of RiskSave Technologies Ltd, which is authorised and regulated by the Financial Conduct Authority (FRN 775330).