Are you familiar with the best quote of all time by Warren Buffett? He said “The best investment you can ever make, is investing in yourself. The more you learn, the more you earn”. Today’s article I want to dive you into the best 10 reasons why it rocks to be an investor, and hopefully inspire you to become the best investor in the world. Without wasting any more minutes lets get to the first reason;
1. Growing your money
Investing may seem like its only for the wealthy and sophisticated, but in fact anyone and everyone can benefit from it.
You can save money monthly and grow that particular investment with the hopes of investing your capital in a much larger and riskier investment or purely growing it for future purposes.
There is a massive difference between growing your savings and investing your savings for growth.
2. Saving for retirement
This is one of the most common reasons why people put money away, to prepare for their future or long-term financial position.
One thing you don’t want to risk is earning money at a young and when you’re older and don’t have the same drive and energy to hustle, you realize that you didn’t prepare in advance.
In the process of investing and saving for long-term purposes, its important to also consider diversifying and not only putting your money in one pool.
There are many options that have been introduced over the years such as purchasing stocks, bitcoin and even investing in potential growing businesses. This is very key and critical.
3. Earn higher returns
The whole point and objective of investing money is to earn interest and returns. Saving money on a month-to-month also has interest and returns on it but due to the fact that those are very conservative “investments”, interest isn’t really the focus.
The reason why I say ‘higher returns’ is because you can diversify your portfolio and invest in equity, money markets, global funds etc.
4. Reach financial goals
Having an investment allows you to grow your funds so that you can reach goals that are intended for that particular investment.
Certain individuals invest money in funds to purchase property over a couple of years, some people invest and make big capital investments in businesses by purchasing stakes. The goal might be different but the aim is to reach a financial goal.
5. Start a business
As mentioned above, you can diversify your investments and intend them for various reasons. Its always advised and highly recommended for individuals to never start a business with nothing.
It’s better to have a firm plan on how to operate the business once its up and running but more than anything, save or invest your funds today so that when the time is right, you take the risk.
The implementation phase of any business is mainly risky financially.
The risk there is losing everything you saved in terms of your capital because you would have wasted all those years,
where those funds could have gone towards something less risky and been beneficial to you. So it’s important to plan when you have a vision or hope to start a business.
6. Reduce taxable income
As a company, investing your funds in other businesses does decrease the profitability for that particular financial year.
As mentioned, it’s important to maintain a diverse portfolio. Sometimes, it can be loans and investments made towards subsidiaries of that very same company.
From an individual point of view, if you invest in an RA (retirement annuity),
it also decreases tax charged on your salary and your taxable income.
However, the benefit is that you can claim the funds back when filing your return. At least a portion of it.
7. Earn dividends
Return on investment for individuals on a normal fund is called interest, however, when a company or an individual gets a return on investment on shares purchased from a company, you refer to those as dividends.
8. Minimize risk
The advantage of having an investment is that it also decreases the risks of finding yourself in a financial position where you don’t have any funds to maintain your daily lifestyle.
It’s always good to be safe than sorry so that you always have something to fall back on when things don’t workout.
So, the aim of minimizing risk isn’t only a result from diversifying but security.
One of the most important aspect of life is to ensure financial security. Most people do that by having a day-to-day job, which would obviously create that security because of the salary you would be earning.
Investing money only increases that level of security because you are purely creating options for yourself should you be in any threatening financial situation.
10. Open to opportunities
The other overlooked advantage and importance of investing is that it always puts you in a situation where you are always ready should an opportunity avail itself.
One thing you want to be is always ready for anything that may come your way just in case someone wants to sell their business or is looking for financial injection to help boost their operations.
Most of these opportunities come at a low cost because in most cases, the individual offering this is in a desperate position.
Somthemba Makinana | LinkedIn