Pile of American Money

Why Invest

It doesn’t matter if you’re working hard to retire or someone who was just given an inheritance, its hard to keep ahold
of the money you have. Most people assume that the safest place for your money, is a personal safe, under the
mattress or into a FDIC (bank) savings account. What you don’t realize is that while your money is sitting in the back
earning little to no interest, its buying power is evaporating slowly with inflation. The only defense against inflation is
a good offence, growing your savings at a higher rate than the current inflation rate.

By investing you are expending money with the expectation of achieving a profit or material result by putting it into financial loans, shares, or property, or by using it to develop a commercial venture.

There are three ways your investments will grow

with the help of compound interest. you earn interest on the money you save and on the interest that money earns. Over time, even a small amount of savings can add up to big money and help you achieve your financial goals.

Sweet: If you buy a $1 candy bar every day, it adds up to $365 a year. Put that $365 into an investment that earns
5% a year, and it would grow to $465.84 by the end of five years. By the end of 30 years, you would have $1,577.50. That’s the power of “compounding.”

All investments involve some degree of risk. If you intend to purchase securities such as stocks, bonds or mutual funds, it’s important that you understand before you invest that you could lose some or all of your money.Unlike deposits at FDIC-insured banks and NCUA-insured credit unions, the money you invest in securities is not federally insured. You could lose your principal, which is the amount you’ve invested. That’s true even if you purchase the securities through a bank.

The reward for taking on risk is the potential for a greater investment return. If you have a financial goal with a long-term horizon, you may make more money by carefully investing in higher-risk assets, such as stocks or bonds. On the other hand, investing solely in cash investments may be appropriate for short-term financial goals. The principal concern for individuals investing in cash equivalents is inflation risk, which is the risk that inflation will outpace and erode returns.