As a mom of two boys, I’m no stranger to every parent’s *favorite* question:

“Why?” 

Here’s a delicious and healthy meal for you to eat. Why? Don’t forget your jacket! Why? Let’s put that fascinating eight-legged bug back in its home outside. Why? Fast forward to their first jobs and I’m sure the conversation will go something like, “Make sure to take some of your paycheck and invest in the stock market!”

Why?

I’m a seasoned pro at answering the tough questions, both as a mom, and as a financial advisor. 

When it comes to questions about wealth-building, the asker — and the situation — gets a little more complex, especially as it relates to a client’s investment strategy.

In 2024, it was reported that about 62% of Americans are currently invested in the stock market. That’s money left on the table and opportunity missed. Investing is one of the most effective ways to build long-term wealth, and if I could offer only one piece of financial advice to you at this moment, it would be that you start investing today. 

“Why?”  I’m so glad you asked. 

The Top 8 Reasons to Invest in the Stock Market

1. Harness the Power of NOW

If there is one top regret I’ve heard from investors over the years, it’s that they wish they invested sooner. By waiting to invest, you lose the potential for significant growth of your assets, put yourself in a position to have to invest more of your money for the same eventual outcome, and create a reality that may force you to work far longer than you had wished. The sooner you put your dollars to work, the more likely you are to benefit in the long-term.

2. Build Wealth with Minimal Time Commitment 

By investing in the stock market, you are creating an opportunity for your assets and net worth to grow without having to exchange your time for money. This is the beauty of passive income. 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.

I cannot reiterate this enough, that investing in the stock market is one of the easiest and least time consuming ways to build long term wealth. 

3. Reap the Benefits of Compound Interest

Albert Einstein once said, “Compound interest is the eighth wonder of the world.” Invest in the stock market and watch your money multiply. We only have so much time in the day. We can’t work 24/7. But our money can. 

4. Achieve Financial Freedom

Many of us work out of necessity to support our lifestyle and financial goals. The exchange of our time for money. By investing your assets today, and allowing these funds to grow over time, the goal is that you will ultimately amass the wealth you need to support this same lifestyle. 

Investing in income producing assets that have continual potential to grow, like in the stock market, will give you the opportunity to become work optional— work because you want to and/or on projects that you feel passionate about— not because you have to. The sooner you invest, the sooner you may arrive at this financial freedom destination where your assets generate enough income to support your lifestyle. 

5. Protect Your Purchasing Power Against Inflation

Inflation is a constant, but its rate fluctuates over time. Over the past 50 years, the average inflation rate in the U.S. has been approximately 3.8% annually. This ultimately means that, on average, the cost of living is increasing at a rate of 3.8% per year. 

Of course, that is not and has not been the case every single year, but on average, this annual increase in prices is eating away at your purchasing power. If you keep your cash in a traditional savings account, these funds will be losing purchasing power year-over-year, sitting there doing nothing for you. One of the few ways to keep up with inflation and/or combat it is by investing.

6. Save on Taxes

Investment income (long-term capital gains and dividends) in non-retirement accounts is taxed at lower rates than ordinary income (like your 9-5). Passive income gets taxed more favorably than the income you actively work toward. Prioritize building up your investments to create an income stream for the future that will be taxed at lower rates than the salary you earn. You can thank me later. 

There are other accounts like a Roth IRA or 529 College Savings Plan that allow you to invest after-tax dollars but then all future growth within the account grows tax FREE. That’s meaningful over time. 

7. Reduce Your Taxable Income 

Contributing to a traditional retirement account with pre-tax dollars benefits you twofold. You continue to build up your retirement account while simultaneously reducing your taxable income—this effectively reduces the tax you pay in the current year. More money to you, less to the IRS. Win-win!

8. Build Generational Wealth

Investing is one of the most effective ways to support your children and loved ones, creating a lasting legacy you can be proud of. Learn more about the many ways that you can begin investing in your children’s future today. 

Build the Future You Want One Investment at a Time

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, commit to consistently investing, and watch your wealth grow over time! 

Have some lingering questions? Work with me to break down those reasons WHY into an actionable plan and investment strategy for your future.