Why investing is important?

Why investing is important?

Many people dream of growing their income and having more money than they have now,
and most people don’t realize how important investments are to growing your income.

Investments are important for people who want to grow their income since investments are
the best way to get more money, without having to depend on your time.

Below I will show you why investments are important when growing your income.

money grows
concept: financial and investment growth

Make your money work for you

Don’t work for money, let money work for you.

Robert Kiyosaki

This quote was one of the famous phrases of businessman Robert Kiyosaki. This investor and writer of several best-selling books that have sold 26 million copies internationally [Rich dad, Poor dad], has been in charge of promoting a transformation of attitude in people so that they can make their money grow.

Many people looking for ways to increase their income don’t realize that they can make
money with their own money.

There are 2 different ways to get money: Giving time for money, and Giving money for more
money
.
The first way is the most common, giving time for money basically means working for other
people, and receiving money in exchange for your time. The second way is giving money for
more money, basically, these are investments.

Investing is how you take charge of your financial security

Financial security is when you have a fixed income without depending on other people, such
as your bosses or other companies. By not depending on other factors, you are sure that
you will not run out of money.

That is why investments are the best option for your financial security. If you invest, you will
have a cash flow that will prevent you from running out of money and help your financial
security.

Not investing, or not doing it properly, can mean a longer working life

As mentioned above, there are 2 ways you can earn income, giving time for money and
investments. The way of not investing and giving time for money has many problems, and
one of them is that it takes much longer to get out of your working life.

When you don’t invest, you have to work harder to get more money, and in many cases, it
can take years to move up a position in your job. And, by the time you realize it, you have
already spent half your life working in one place, and without earning what you want to earn.

Savings vs Investing

Many people do not know how to choose between saving or investing their money, this is
because they do not know the benefits of these. Here I will show you which one is the
best.

Savings

Savings are very good for times when you have extra expenses, such as hospital expenses,
car expenses, etc. But, savings are not a good idea to increase your income since in reality
what increases a little bit is your wealth, not your income.
You keep earning the same, it’s just that you start to accumulating a percentage of your
money. Yes, you may start to increase your money more and more, but it is at the same rate
and that rate depends a lot on how much you save.

Investing

Investments are a great way to grow your money since it does not depend much on your
time and you can get great income.
You can start investing little money, and keep reinvesting until a time comes when your
income will grow so much that you will be able to live just by investing, and you will not have
to do anything else. Obviously, smart people don’t sit idly by, they keep investing more, to
get even more money.

Top reasons for investing

Higher investment returns

Most investments are compound interest. Compound interest investments are investments
that grow exponentially, also known as interest on interest. What does this mean? This
means that the profit you get from the investment depends on how much you invest.
The result of these investments are higher investment returns, this means that the return of
the investments you make will be enough to pay for your lifestyle.

Retirement planning

As I already mentioned, the return you get will be so great that you will never have to work
again and you will be able to live only on the return you get from your investments.
Many entrepreneurs and millionaires live this way. This is why millionaires, especially the
elderly, live in luxury without having to take care of their companies anymore, because they
live on the return on their investments.
Investments are the best retirement plan in the world.

Tax efficiency

Many people don’t know this, but when all your income comes from investments, you can
earn much more since you have taxes on your side. If you invest, less of the money you
earn will go in taxes compared to if you earn money normally.
This means that investing is much more convenient for you since you will not pay as many
taxes compared to other ways of earning money and growing your income.

Beat inflation

And best of all, when you invest, global problems such as inflation do not affect your income,
since in the vast majority of investments, your income is not affected by changes, since you
earn based on your investments.
This is an important factor since it makes you have a lower risk of problems like these.

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