We all know saving money for the future is a good idea but saving is just the first step towards future financial planning. Investing to grow your savings or indeed to create savings for the future is the ideal method to achieve future financial prosperity. Here are our top six reasons to invest:
- Create Wealth
Most people aspire to greater wealth, greater wealth allows you more options and greater freedom for the future. By reaping the reward of the compounding effect you can create or grow wealth giving you more money for retirement, recreation and helping others.
- Higher Returns
If you keep your money in your back pocket instead of investing it, your money doesn’t work for you and you will never have more money than what you save. By investing your savings, it will generate more money in the long term through buying assets that grow in value.
- Save for retirement
A compelling reason for you to invest is the prospect of not having to work your entire life! There are only two ways to make money; by working and/or having your assets work for you. You don’t want to rely on Centrelink to completely finance your retirement years.
- Achieve a goal
Investing can help you reach large financial goals earlier. Saving for a beach house, private education for your children or grandchildren or a house deposit. If your savings invested are earning a higher rate of return than cash, you will be earning more money and achieve your goals in a faster period.
- Minimise your tax
Investing in shares can provide you with franking or tax credits to reduce your tax. Utilising the Superannuation system can reduce the amount of tax you pay. Utilising tax-deductible contributions and lower tax payable within super
- Freedom and choice
Building wealth and creating a sum of money gives you independence and choice. Having a financial buffer affords you time to contemplate future options, rather than having to make a decision quickly or only being able to afford the cheapest option in the circumstance of a health issue or other times of distress.
Having investment wealth increases the options available to you. Some people have invested well enough that they are completely independent and can make decisions about work and living arrangements in the knowledge they are financially secure whatever they choose.
If you don’t invest, you are missing out on opportunities to increase your financial freedom. Of course, you have the potential to lose your money in investments, but if you invest wisely, the potential to gain money is higher than if you never invest.
For advice on investing or for a complimentary consultation, please contact us.