The push for individuals to become investors is more prevalent than ever before. Each and every one of us has access to loads of information about investing, options as it relates to where we invest and access to a variety of investments.
Then why are only about 55% of Americans investing in the stock market?
Perhaps they are fearful of the stock market. Maybe they feel as though they don’t have enough or don’t know enough to invest. Whatever the reason is – I could make a pretty strong argument that despite your uncertainty around the stock market – the potential benefits of the stock market far outweigh the perceived negativity.
Investing in the stock market is one of the most effective ways to build wealth in the long term. And the best time to start…
If there is one regret I’ve heard from investors over the years, it’s that they wish they invested sooner. Putting off investing is a costly choice.
By waiting to invest, you…
The sooner you put your dollars to work, the more likely you’re to benefit in the long term.
If that right there doesn’t give you enough motivation to get started then…
By investing in the stock market you are creating an opportunity for your assets and net worth to growth without having to exchange your time for money. This is the beauty of passive income. That you will be making money while you sleep and building wealth for you and your family over time to support your long term financial goals.
Albert Einstein once said “Compound interest is the eighth wonder of the world.” Your money that you invest then makes money. We only have so much time in the day – we can’t work 24/7. But our money can.
Many of us work because we have to. We have to earn that paycheck or salary because it supports our lifestyle today and helps us to reach our goals for the future.
But investing your assets today and allowing them to grow over time will put yourself in a position where your assets and the income derived from them alone will be able to support your lifestyle. You will work because you want to. Not because you have to.
The sooner you invest, the earlier you set yourself up for this financially free reality.
Inflation is currently at a 40 year high coming in at 8.3% as of April 2022. That ultimately means that the cost of living is increasing at a rate of 8.3%. Of course, that is not and has not been the case every single year but on average inflation rates have lingered somewhere around 3.5% (+/-) over the long term.
That annual increase in prices is eating away at your purchasing power. If you kept your cash in a savings account – your cash would be losing purchasing power year over year. One of the few ways to keep up with inflation and/or combat it, is by investing.
Investment income (Long term capital gains and dividends) is taxed at lower rates than ordinary income. This makes it an attractive option to prioritize building up your investments to create an investment income stream for the future that will taxed at lower rates than the salary you earn.
Contributing to a traditional retirement account with pre-tax dollars is beneficial for two main reasons: you continue to build up your retirement account and meanwhile also reduce your taxable income. This effectively reduces the tax you pay in the current year.
If some of your goals include providing your children or family with support throughout their lifetime whether that be to support their lifestyle, help pay for college or a down payment – investing is going to be one of the best ways to achieve this goal.
There are many ways that you can begin investing for your children – click here to learn about the best ways to save for your children’s future.
Long term investing is one of the most effective ways to build wealth. Continue to educate yourself on your options, get yourself comfortable with the idea of investing and get started now!
If you need additional help – feel free to schedule a 1:1 call with me to help you get started.
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