Benefits to Investing

Investing provides you with the best chance to retire at whatever age you would choose. Investing allows the investor to grow his or her money without labor. Generally people work their whole lives to save for a retirement that can be afforded with their savings.  However, investing makes this process much easier, as your savings can grow into more money by being invested.

Interest is Money You Don't Have to Work For

You could work a whole year and make just $30,000, or one good year in the stock market, you could earn those returns with even a retirement portfolio of $100,000. Investing allows you to grow your money without working; you live your daily life while your wealth grows because it is in the right investments. Rather than working for your money, your money will work for you.

Very Few People Retire by Saving Only

Saving money in bank accounts or in low return investments is hardly a way to plan for retirement. Unless you're stockpiling large amounts of money, the returns from cash are nulled by inflation and other factors that affect your savings. You'll have to invest if you plan on reaching retirement. Contributing $1000 to a retirement account each year for 40 years will result in $401,000 with a 10% return. With a 2.5% return that comes from a standard bank account, you'll be left with $64,000 off a total investment of $40,000. The difference of 7.5% per year is a figure of 10 on the total amount saved for retirement. To reach your goals and have a healthy retirement ahead of you, it will take much much more than just saving.

Start Small Rather than Starting Later

Many people avoid investing because they feel that they cannot afford it; if anything, this is the exact opposite of how investing should be. Those who can't afford it now certainly won't be able to afford retirement if they can't make it now. Starting with investments as small as $50 a month into a mutual fund or into an ETF will get you in the game and give a nice start. Rather than trying to play catch up later, invest what you can afford now to reap the benefits in the future. A 401k plan is a great place to start as each investment will be matched either partially or in full by your employer.

Investing Grows Your Money Faster than a Pay Raise

When you're working, there is only a certain amount that someone will pay you before your work is no longer as valuable as the amount you perform in one day. With investing, there are no limits. Warren Buffett has made billions of dollars as an investor; in contrast, the richest man who has worked for his living is Tiger Woods who has amassed $1 billion in income from various sources. The simple fact remains that when your money works for you, whether in stocks or in other investments, you'll progress far faster than working for your money.