Why Invest?
May 18, 2022
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Financial Freedom
One of the most common reasons people choose to invest is because they want to achieve financial freedom. This means having enough money to cover your living expenses without having to work. For some people, this could mean retiring early. Others may just want the peace of mind that comes with knowing they don’t have to worry about money.
Investing is a great way to gain financial freedom. Creating a stream of passive income from investments can help set you up for the future. Instead of spending your money, save it, then invest it- that way your money is always working for you.
Saving for Emergencies
Another reason to invest is to create a financial cushion in case of an emergency. Unexpected expenses, like a medical bill or car repair, can throw off your budget. If you have money saved up, you can cover these costs without going into debt.
Investing gives you the option to make money while your emergency fund remains untouched. You can choose a liquid option so you are free to withdraw at any time, yet still, be making a higher return than keeping your money in a savings account with a low-interest rate.
Alternative to Savings
If you’re looking for a place to park your money, investing may be a better option than keeping it in savings.
Over time, investments tend to grow at a higher rate than savings. After all, the national average interest rate for a savings account is only 0.06 percent!1 This means you could potentially make more money by investing, than you would by keeping your money in a traditional savings account.
Enjoying Retirement
If you’re hoping to enjoy a comfortable retirement, investing can help you reach that goal. This is because, over time, your investments can grow to provide you with a source of income in retirement. This can help supplement your Social Security benefits and give you the financial security you need to enjoy your golden years.
Conclusion
These are just a few of the ways investing can benefit you. If you’re looking to achieve financial freedom, investing may be worth considering. It can help you reach your long-term financial goals and enjoy a comfortable retirement.
Sources
1 Perez, Lauren Cepf&Reg; “What Is the Average Interest Rate for Savings Accounts?” SmartAsset, 29 Apr. 2022, smartasset.com/checking-account/average-savings-account-interest.