Let’s get right to the point of this blog post.
Investment: the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value
When it comes to personal finances, the goal is to have your money work for you.
Too many people only work for their money. One word to describe these types of people are “employees”.
While this may be the first step in acquiring money, it’s not the only step.
Once you get your paycheck, there should be a percentage of it that you are committed to investing.
This percentage you commit to invest should be looked at as “paying yourself“.
Now let’s address 2 of the most important words in the world of personal finance:
Compound Interest.
Compound Interest :When the interest you earn on a balance in a investing or savings account is reinvested, earning you more interest (money).
I’ll explain.
So let’s say you have $10 in an investment account that earns you 5% interest once a year (the compounding frequency).
After your first year you’d have a total of $10.50. You earned $.50 cents just by letting your money sit in this account!
Furthermore, you’d make even more money the following year!
Because you’d get 5% of the new total ($10.50) which would now bring your account value to $11.025 or about $11.03 after 2 years of being in that account.
If you’re keeping track, you’ve made $1.03 over 2 years by simply placing (and leaving) this money into this savings or is investment account.
*Note : Not every account will give you 5% interest on the money you place there. This is merely an example. But now you know to look for this when searching for new accounts!
Question : Why did your example use a relatively small sum of $10?
Answer: to show that no amount is too small to invest.
If you invested $10 a week (instead of a year) you’d have $520 in that account. Now do the math on that!
I’ve got 3 things for you to consider as I prepare to end this blog post.
Number 1:
Invest frequently. Remember that “consistency is better than intensity”.
Investing $20 each paycheck is better than investing $200 every six months. Make investing a habit.
Number 2:
If you didn’t begin investing when you were 18, the next best time is right now.
We can daydream all day about the thousands of dollars we would’ve had today if we would’ve invested consistently 10 years ago.
(Like investing $5 every time we would’ve bought Starbucks ).
However we cannot dwell on the past. Instead let’s just learn from it.
Number 3:
The more you invest, the more you can earn.
Simply put, “More money makes you more money”.
When it comes to investing, your potential for greater returns increases, the more you put in. Seriously.
This is why it’s essential to build a habit of investing every time you get paid. You are quite literally paying yourself!
The main platform I use for investing is a mobile app called Webull. It allows you to invest in stocks as well as buy crypto.
If you are interested in beginning your investing journey, consider using my link below.
https://a.webull.com/8XVWdA5VS5dQ1IIT6U
For a limited time you can get 5 Free stocks and it will also help support the ASAS Blog as well!
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