Contrary to popular belief, there is more to investing beyond the prospect of becoming “rich” (though this is certainly a desirable outcome to the process).
Investing should be thought of along 2 dimensions:
- You can generate more money by earning interest on what you put away, and
- You can buy and sell assets that increase in value
For the investing public, the perception of both the overall market and the performance of individual listed companies are crucial predictors of their participation in capital markets. In fact, the decision not to invest – and to instead keep money in your ‘back pocket’ – could mean that you’ll never have more money than what you save. Worse, depending on your national economy, the effects of inflation may further affect both your ability to maintain purchasing power and your ability to preserve your savings.
Investing should be considered based on timelines, risk profiles and overall suitability as not everyone has an immediate need to invest in the market.
For more information on the investment process, please consult the following educational sources: