Whenever we have some extra money for saving, we always think about saving accounts. It might look safe and more convenient to you. But the bigger picture is different. With the rapid increase in inflation, depositing your money in banks can lose you profit nowadays.
On the other hand, stocks can generate more profit than your savings account; on a large scale. But I know you would say “It is not safe”. So here I am telling you the top five reasons why you should invest in instead of typical savings account.
- Five Reasons Why You Should Invest in Stocks
- Stocks have been in the market for ages. And it’s still going on. Ever wondered why stocks are still superior? Why is everyone thinking of investing in stocks? Let’s find out.Reason-1: Easier than Ever
- Reason-2: Start with Whatever You Have
- Reason-3: Compete with Inflation
- Reason-4: The Ultimate Power of Compounding
- Reason-5: Getting Rid of Fixed returns
Five Reasons Why You Should Invest in Stocks
Investing nowadays has become easier than ever. If you think that the lack of knowledge of the stock market will be the reason for your failure, think no more. The digital platform of investing is painless. Completing KYC and identity verification is a hassle-free process, and you can do it by sitting at your home. All you have to do is to find a loyal stock broker on whom you can rely.
Reason-2: Start with Whatever You Have
It’s not always necessary to invest a huge amount into stocks. Start with whatever you can save. Maybe next time, before consuming an extra pair of shoes which you’ll probably never wear, invest in stocks. It’s simple. You have the power of monitoring where your money went and how well it is performing. Also, withdraw/sell your stock whenever you want.
Reason-3: Compete with Inflation
We’ve noticed a terrible impact of inflation in our life. Our living standards went down. While the federal govt Is trying to keep the inflation rate in control, it’s not working. While you are thinking to put your money in your savings account, where they’ll offer you a 1.5% interest rate, think about a 2% inflation during a year. Technically, you are in debt of 0.5% of the investment. On the other hand, stocks can give you profit up to 10% though stocks are not predictable. It has some risk factors, but there’s a say “No risk, no gain”.
Reason-4: The Ultimate Power of Compounding
Let me give you a proper understanding of compounding and how it grows your wealth with an example. Say you have invested $100. Now, if you gain a profit of 10%, your profit will be $10 for that $100 investing. Now, you have $110 as your wealth, and it will be invested again. Say, you gain a profit of 10% again. Now you have $120 at your hands, and you will be able to invest that again. Thus, your wealth will be growing.
Reason-5: Getting Rid of Fixed returns
Fixed returns can be boring. Sometimes, you might think that your money will do better if you invest it somewhere else. If you consider this, fixed deposits lose their appeal instantly. You will be unable to move the investment from the deposits. On the other hand, stock markets are fluid. It flows from here and there and gives you a good amount of percentage of return on a good day.
If any of your friends ever told you stock is dangerous, it is time to prove him wrong. I would say these are all myths, and you are missing a great opportunity to increase your wealth. It is all about our perspectives and how we see them. Right now, investing in stocks is growing very high because of its ease of access and monitoring. A few days of research can give you a proper idea of investing in stocks. There are stock brokers as well to guide you. So, it’s time for you to diminish all of the myths and start a new adventure in the world of stocks.