There are many reasons why people invest, and we are exploring this.
- Financial Security
- Financial Independence
- Building Wealth
- Meeting Goals
Investing allows you to be financially secure, and this is desirable for many people. Individuals want to be financially secure and having extra money will allow for this. To be met by financial hardship and be able to pull yourself through easily, or avoid it completely is a desirable way to live. By having investment, you are secure enough to meet unforeseen circumstances head on and survive the storm.
Being financially independent enables you to rely on yourself only when you suffer financial hardship. By securing enough money to pay for your day-to-day life, needs, and financial troubles you will be financially independent, this may allow for early retirement. Investing allows you to build on your wealth. You can save your profit or reinvest it elsewhere. Building on your wealth this way is the best way to achieve both financial security and independence.
Many investors have clear goals mapped out ahead of them. This way they can build an investment portfolio that is aligned with their own personal financial goals. You may have a dream house or car you wish to buy with no real plan on how to buy it. By investing your money, you can reach your financial goals in the long term. They don’t have to particularly big or small, but something you can set your sights on to work towards, enabling you to grow your money.
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Invest in what you know
One of the biggest mistakes that can be made in investing is getting involved in investments that are complicated and ahead of you and your abilities. It’s important to invest in business you understand, so you can make informed choices about your investment path. It would be difficult to forecast your personal success.
Holding your stock
A good quality business to invest in earn higher returns and increase in value over time. The most patient investors are the ones who reap the benefit and reward of investing initially. Be patient when you invest, you’ll thank yourself in the long run.
What can you invest in?
- ETF’s – Exchange-traded funds
- Gold / Silver
- Index Funds
ETF’s
An ETF is an Exchange Traded Fund, this is a way of investing in a wide range of bonds and shares as part of one package. An ETF is largely similar to index funds, that typically track a markets performance. The difference lies in how they are bought and sold.
Gold / Silver
When considering investing in hard commodities like gold and silver, always find yourself a reputable bullion broker such as Sharps Pixley. Typically, investors like to buy gold and silver to diversify their portfolio, whilst securing something that is considered safe during economic downturn. Additionally, hard commodities such as gold and silver are a hedge against inflation.
Index Funds
Index funds are investments that track the performance of a market index. An index fund includes a variety of investments that are diversified in securities across that specific index. An index fund doesn’t try to beat the market, they simply try to be the market, buying stocks of each organisation/business / firm listed on an index to mirror the performance of the index entirely.