Why Should You Invest?
Excerpt Adapted From: The Financial Shepherd-
Why Dollars + Change = Sense by Glen Wright and Sy Pugh
Investing in your future is the equivalent of investing in yourself – and vice versa. Think of investing as creating multiple streams of income for your household and a process that does not require additional work from you. Instead, you are identifying profitable ways to make your money earn even more money. By applying the principle of financial leveraging and using the power of compound interest, investing allows your money to go to work for you and help fund your future goals and aspirations. Investments make dreams come true. Here are some basic questions to ask yourself and to discuss with your financial planner when you are considering investment strategies:
- Why am I investing?
- Do I need current income or am I saving toward my future accumulation goals?
- When will the money I plan to invest be needed?
- How much risk am I willing to take; and am I a conservative investor or an aggressive investor?
- Can I lose all or part of my investment fund and not have my standard of living affected?
- Are income taxes a concern for me?
- Will my investments change my overall tax status?
- What is the current economic forecast?
- Do I have enough knowledge, information, and skill to make wise investment decisions?
- Do I have enough time to manage my investment portfolio?
- How much do I have to invest?
- Do I have a good investment plan or do I have access to a good financial planner?
“If knowledge is power, then what you don’t know can be devastating.” Many of us hear important information every day, but we fail to retain it. Not only is it important to have knowledge, but it is also important to be aware of what you don’t know – and then be willing to learn so that no one can take advantage of you or your financial situation.