Why Should I Invest?
Investing is like exercise—everyone knows it’s good for them, but not everyone gets around to doing it. The key difference? While exercise helps you stay fit, investing helps your wealth grow. And just like skipping workouts can impact your health, avoiding investing can affect your financial future.
Investing Helps You Beat Inflation
Saving money is important, but keeping too much of it in a low-interest savings account for years can actually make you poorer. Why? Inflation.
Inflation is the gradual rise in prices over time, which reduces the purchasing power of money. Take the British pound, for example:
- In 1950, £1 had the same buying power as about £29 today.
- This means that £1 today buys you only 1/29th of what it could in 1950.
Why does this matter? If your savings grow at a lower rate than inflation, your money loses value. For example, if you have £100 in a savings account earning 2% interest per year, but inflation is at 3%, your real purchasing power actually declines. You may have £102 after a year, but that £102 buys you less than your initial £100 did.
How Investing Can Help
While no investment is guaranteed to beat inflation, assets like stocks, ETFs, and real estate have historically grown at a faster rate than inflation over the long term. By investing wisely, you take on some risk, but you also give your money a chance to grow instead of shrinking in value.
Start Growing Your Wealth
The sooner you start investing, the more time your money has to work for you. Whether you’re looking at stocks, bonds, ETFs, or real estate, taking action today can set you up for financial success in the future.
Are you ready to make your money work for you?Lets Discuss!
