Why we most invest for the future.

Investment or investing have been talked about by so many social media influencers and motivational speakers. Alone the years the importance of investments have become a thing we as humans have come to see as a way to really thrive. We have invested in agriculture, stocks, bond, and so on. Most of this investments have been seen to make profits over time and increase capital as well as productivity.

Investment is a vital factor in human development be it an individual or a country. As we can not do without investments, be it money, time , strength and so on. Investment is so important that it is found in all human endeavours.

Reason why we should invest

1. Better returns: Saving money traditionally in a bank or under your mattress will ensure that you have money when you need it, but it is not going to make you wealthy. Putting your money into a savings account earns you interests that is often not much better than inflation. Oftentimes much of the money you make is used to pay the monthly fees that these accounts charge you. Investing entails a little more risk, but if you make smart investing decisions and understand the markets, you can make more money over time with your investments.
2. Beat inflation: Speaking of inflation, it can fluctuate depending on how the economy is doing. For example, in 2020, when covid hit, inflation in Switzerland was negative -0.73% but the previous year it was 0.36%. Usually, Savings accounts in Switzerland pay you interests up to 0.5%., so if you are lucky enough you can sometimes beat inflation, but never in huge proportions. With investing you can hope to beat inflation in higher proportions if smart decisions are made, leaving you extra money to buy your dream house.
3. Provide a regular income: Investing can be the solution for people that need extra money on a regular basis. Each month you can decide to let the money that you potentially gained in the stock markets into your account and reinvest it to generate even more money, or you can take it and enjoy extra spending. There is a whole branch of investing called income investing using things like stock dividends to generate regular returns from the money invested.
4. Grow your money: Investing your money can allow you to grow it. Most investment vehicles, such as stocks, certificates of deposit, or bonds, offer returns on your money over the long term. This return allows your money to build, creating wealth over time.
5. Save for retirement: As you are working, you should be saving money for retirement. Put your retirement savings into a portfolio of investments, such as stocks, bonds, mutual funds, real estate, businesses, or precious metals. Then, at retirement age, you can live off funds earned from these investments.
6. Based on your personal tolerance of risk, you may want to consider being riskier at a younger age with your investments. Greater risk increases your chances of earning greater wealth. Becoming more conservative with your investments as you grow older can be wise, especially as you near retirement age.
7. Earn higher returns: In order to grow your money, you need to put it in a place where it can earn a high rate of return. The higher the rate of return, the more money you will earn. Investment vehicles tend to offer the opportunity to earn higher rates of return than savings accounts. Therefore, if you want the chance to earn a higher return on your money, you will need to explore investing your money.
8. Reach financial goals: Investing can help you reach big financial goals. If your money is earning a higher rate of return than a savings account, you will be earning more money both over the long term and within a faster period. This return on your investments can be used toward major financial goals, such as buying a home, buying a car, starting your own business, or putting your children through college.
9. Build on pre-tax dollars: Some investment vehicles, like employer-sponsored 401(k)s, allow you to invest your pre-tax dollars. This option allows you to save more money than if you could only invest your post-tax dollars.

Why is it good to start investing early?

Starting investing at an early stage of your life has some advantages, here are three:
 

1. Longer recovery time: If you invest early in your younger years and incur a loss, you have more time to make up for it. Indeed, markets constantly go up and down but over the long term they tend to rise. Thus, with early investments, you give your assets more time to recover.
2. Compound returns: Early investments lead to compounding returns. Indeed, your money grows with time, and since you have more time to make money by investing early you can expect higher returns overtime. Your returns add up over the years, so the earlier you invest, the more you generate in the long-term.
3. Retirement plan: If you want to retire as soon as possible, starting investing early is perfect for you as it allows you to save your returns or even if you’re good at it, have monthly “salaries” paid by your investments.

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