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Why is it important to invest?

Whatever your goals may be in life, whether it’s to send your kids to private schools or to retire at an early age and sail around the world, investing your money may just help you get to where you want to go!

There are only so many ways to make money. The most obvious way to generate an income source is to receive a salary or a wage and if you’re a business owner, you pay yourself an income.

However, it’s what you do with your ‘leftover’ money that is really important. After your household expenses are taken care of, any surplus money left sitting around should be invested. Why do you ask? So your money works for you and it grows with you.

Top 3 Reasons Why Investing is important


1. Build your Wealth

If you want to grow your money to seek out all your life dreams and wishes then you should consider investing your savings to do just that. Hiding your surplus money under your mattress or stashing it in a cookie jar is not a smart money move. No one is going to reward you for being lazy with your money.

If you want to make your money work for you then put it to work, and invest in assets that will not only generate an investment income (like interest from fixed interest investments or dividends from shares, rent from property) but ones that’ll grow in value as well. Growth assets like shares and property. This way your initial investment money is working super hard to earn an income and at the same time grow in value over time as well.

No matter how small your initial savings might be, it’s never too little to start an investment plan. An investment plan should be one that is right for you, your investment goals, your timeframe and your tolerance for assets that move in value, up and down. How well you can stomach market surges or plunges is a discussion you should have with your financial planner so you can sleep well at night and remain confident.

2. ‘Compound’ your Wealth

When you invest it’s amazing what you can do with your investment income. It is important to continue to pay off your debts like your mortgage but with the extra investment income, you generate you can choose to use it to make extra repayments on your mortgage or reinvest it.

If you choose to reinvest your investment income this kick starts the power of compounding.

The power of compounding is where the investment earnings are invested back into your original investment so it continues to grow the principal amount and at the same time generate extra earnings year after year. In other words, you continue to top up your investment with its own earnings so the initial investment amount grows and grows in value year after year for as long as you keep the investment.

Growth assets are designed to grow and move with the market but it’s important to know it can easily go down in value as well. This is why it’s essential to have ongoing reviews with your planner and adjust the portfolio to suit changing needs and situations.

Giving your money every chance to grow can only be achieved if you invest your money wisely and smartly. Get your money working for you and not the other way around.

Pursue your dreams

Investing is a means of giving your money a chance to grow, and to grow your wealth. Once your wealth is built up you have the financial security and the freedom to pursue your life goals, and still have enough to retire with comfort.

With additional sources of investment income and wealth, you are able to reduce your debts faster to pursue other wealth-building opportunities and create lifestyle options to enjoy the things you like. This could be to travel around the world, volunteer and give back, get into business, financially support your children’s dreams or simply retire early and take it easy.

It is easy to understand that investing makes good financial sense. It’s giving your hard earned money the chance to work harder and smarter for you. It’s a real opportunity to build and grow your wealth. If you’re a novice when it comes to investing, it’s best to speak to a financial planner to discuss the right investment strategies for you.

The information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your personal objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs.