Are the Benefits Worth Investing?

The benefits of investing are always worth the risks and efforts.  There is no better way to build wealth than investing. While you can save your whole life, the end result would be peanuts compared to the same amount properly invested in a diversified portfolio. When compound interest is on the side of the investor, the results are tremendous.

Why Invest?

The best reason to invest is the rule of 72 or compound interest. When you buy into a stock mutual fund or another investment, your returns are compounded year over year until you withdraw. Consider an investment that make 8% per year, after 40 years of investing, that original investment will have multiplied by 21 times over. An investor who is 25 years of age planning to retire at 65 would be able to turn an investment of $5000 into $105,000 without ever working for the extra $100,000. Making your money work for you is why many people choose to invest.

Work for Your Money or Let Your Money Work for You

As you save for retirement, you'll likely be working for every penny you earn, but the second you drop your main income and become a retiree, you'll be rewarded with an income that comes directly from the money you have saved. You could either spend 40 hours a week to earn $50,000 per year, or $1 million in the safest of investments will return the same amount. Saving money allows you to let your cash work so you don't have to continue working. After all, the most important resource in your life is time.

Very Few People Retire by Saving

Very few people make it to retirement by saving alone; it's practically impossible, as saving money in bank accounts and under the mattress leaves you with devalued cash. Over time, inflation will eat away at your savings unless you can grow your money at a greater rate than inflation. To protect the spending power of your money and to grow wealth, you'll have to produce a return equal to or greater than the average rate of inflation. Rising prices are something that is unlikely to go away any time soon, so investing now is the only thing that can be done to protect your wealth.

If the rest of the world is investing, you need to

If the rest of society is investing, you'll simply fall behind in wealth and spending power if you don't keep up with your savings. Investing is the great equalizer that affords everyone the chance to be a millionaire and even billionaire, just by playing the cards correctly. Famed billionaire Warren Buffett made his billions entirely through investing in the US stock market and buying up profitable businesses. Instead of accepting a job as a source of income, he turned his money into a source of income. Investing is one of the best professions and sources of income because it knows no boundaries; the richest people in the world haven't worked for their money - their money has worked for them.