The term Investing has been gaining popularity more than ever, and for the right reasons. This is the time for you to learn about investments!
If you don’t invest, you are missing a lot of opportunities to make your money work for you. If done properly, the potential to gain from investments is much higher than the potential to lose.
I started to learn about investments from 2018, and I have to tell you – this is the best thing I have got into.
“If you don’t find a way to make money while you sleep, you will work until you die.”
– Warren Buffet
Topics we’ll be covering:
- Make the Compound Interest Work For You
- What about Your Future?
- Reach Financial Goal – It’s like a Side Job
- Endless Opportunities – Even Celebrities and Athletes Invest!
- But Most Importantly, Invest in Yourself
Possible Reasons for You to Invest
1. Make the Compound Interest Work For You
Have you heard the term ‘compound interest’? It’s the addition of interest to the principal amount. In other words, it means to reinvest our interest, so that we can earn interest in interests.
Some argue that the difference between the simple interest and the compound interest doesn’t differ much. I would agree with that to some extent. But as time moves forward, the difference between them would be more evident.
Let’s suppose you have invested $10,000 at 8% interest rate in two bank accounts – one with compound interest while the other with simple interest.
As per the above table, after year 1, both the simple interest (SI) and compound interest (CI) are $800.
After 10 years, the difference expands – $11,589 vs $8,000. 30 years later, the gap between these two is evident as CI is almost 4 times more than SI – $90,627 vs $24,000.
Finally, at the end of 50 years, CI is a whopping 11 times more than the SI – $459,016 vs $40,000.
You wouldn’t want to miss something that big of an opportunity, would you?
If you are already investing, then I would urge you to reinvest your dividends instead of taking them out. What reinvesting interest is to a bank is the same what reinvesting dividends is to the stock market.
History has given us conclusive evidence that the stock market will always go up in the long run. So even if you invest at the worst time, you will still be better off in the long run.
“Compound interest is the 8th wonder of the world. He who understands it earns it; he who doesn’t pay it.”
2. What about Your Future?
As the name implies, investing is usually done with consideration for the future.
Many of us are so busy making money for the company we work for that we forget to save some money for ourselves. We live from pay-check to pay-check.
What would you do if there’s an emergency situation? A pandemic like this where millions of people have already been unemployed. Would you be able to cope up with whatever little savings you have kept for yourself?
How much will the government help you? Not much.
To avoid all these hassles, investing is the prime solution. It will assist you in providing you a reliable source of income in the long term.
Also, if you begin investing early, you would have at least something to show up in case of any emergencies.
3. Reach Financial Goal – It’s like a Side Job
One of the best features of investments is that we can do it anytime. Irrespective of whether you are a student or a 9 to 5 employee, you can still manage your schedule to invest.
If done well, investing could actually be your side job. This will give you extra income, which will help you achieve your financial goal quicker.
Your financial goals could be anything from paying for your college tuition to buying your home or even becoming a millionaire by 40.
Taking my own example, I am currently doing my Bachelor’s Degree. The college timings are from 9:30 to 4:30. After that, I try to learn about investments as much as possible. I read related books, blogs, and take online courses. I feel like I’m actually having a job, as I’m earning some money over time. It might not be much, but I’m happy that this is also helping me to achieve my financial goals to some extent.
Most of the people who invest do have a side job anyway. So I would encourage you to try learning about investments in your non-working hours. It might be hard at first, but don’t worry – you will get used to it!
4. Endless Opportunities – Even Celebrities and Athletes Invest!
As the number of startups is rising, they need money to run their business. You could well find the next Microsoft or the next Google.
To encourage you further, even your favorite celebrities and athletes could be busy investing in their spare time.
- Ellen DeGeneres – When she’s not on The Ellen DeGeneres Show, you might find her flipping homes (real estate).
- David Beckham – After retiring from football, he brought out his own fragrance and clothing line company. Now, he’s getting a lot of dividends from his investments.
- Ashton Kutcher – Besides playing in the hit show “That ’70s Show” and “Two and a Half Men”, he was an early investor in Uber, Spotify, and Airbnb.
- Shah Rukh Khan – The Bollywood megastar is not only the richest actor in the world but also a smart investor. He owns a production house, VFX studio, Indian cricket team. Moreover, he continues to diversify his portfolio.
- Ion Tiriac – The former tennis player is currently the richest Romanian. He has investments in real estate, insurance, construction, and other areas.
But Most Importantly, Invest in Yourself
Now, I would want to talk about the greatest investment that you could possibly make – In Yourself.
The best investment you can make is in yourself. The more you learn, the more you earn.
Investing in yourself will provide you much more returns than any company or bank can provide you with dividends or interests.
The best thing about investing in yourself is that you won’t even have to spend your money if you don’t want to. There are plenty of free resources you can take advantage of, especially with the help of the internet.
What better occasion than to improve ourselves now, as Coronavirus has compelled most of us to stay inside.
What activities or skills have you always thought to improve, but never got the time? Programming? New language? Writing?
Even if you haven’t thought about any particular skill to improve on, don’t worry. Try to be an active learner in your field. Gain new experiences to keep yourself ahead in the game.
Personally, I have found Investing in Yourself fascinating. I have learned a lot from the people who have already been in my position. There are some whom I want to recommend to you as well::
- Gary Vaynerchuk – If you are active in social media, then you might know him. He is well known for his side hustling and will provide you some great tips to do the same.
- Tony Robbins – A man of net worth $500 million, his best selling ‘Awaken the Giant Within’ and ‘Unlimited Power’ have helped a lot of people.
- Darren Hardy – He’s the man behind the book ‘The Compound Effect’, which gave me the idea behind the idea of Compound Interest.
“We’re not really good at knowing what we want, and we are very quick to say “this sucks”. That’s where the opportunity lies.”
Whether you are investing in the stock market or in yourself, you should start as soon as possible. It’s because the sooner you do, the better compound effect works on your side.
Stop Reading This, Start Investing!