Do you have extra money left over each month after bills? Here are some reasons to invest that extra change and how it will benefit you in the long run.
If you have money left over after paying all your bills each month, you’ll want to use that money smartly. Rather than blowing it on frivolous purchases or letting it sit in a savings account where it’s earning barely anything, check out these reasons to invest that money.
Investing your money doesn’t have to be scary. In fact, you can be as hands-on or as hands-off as you like. A financial planner can help you figure out the best investment strategy for you and your goals. Keep reading for five reasons why investment is important.
The Most Important Reasons to Invest
The reasons why you should invest your money are plentiful. Here are five of the most powerful reasons why you should invest and make the most of your money.
1. You Can Grow Your Wealth
When you invest your money, you allow it to grow. Stocks, certificates of deposit, and bonds generally offer returns over the long term. Keeping your money invested long-term allows it to grow as interest compounds. A small investment when you are young can yield big returns later in life.
Investment accounts often offer the highest rate of return, so if you really want to make your money work for you, investment accounts will give you the opportunity to earn the highest return on your money.
A CD is one option for investing. Check out Manasquan Bank’s CD rates here.
2. You Can Save For Retirement
Did you know that experts recommend that you should save enough to replace 70% to 90% of your pre-retirement income in retirement? You should invest while you are still working and put your money into a portfolio of investments that includes stock, bonds, mutual funds, or businesses.
A financial planner can help you best construct this portfolio based on your age and anticipated date of retirement.
3. You Can Save with Pre-Tax Dollars
Some investment accounts allow you to save pre-tax dollars. Employer-sponsored 401(k)s or 403(b)s allow you to invest your pre-tax dollars, giving you more money to invest.
4. Your Employer May Match Your Investment
Many employers will also match these investments. If you are investing in your employer-sponsored retirement plan, your employer may have a program to match your investment, doubling the amount that you invest.
5. You Can Provide Security For Your Family
In the event that something happens to you or you lose your income, money that you’ve invested could be liquidated, providing needed financial support for your family.
The Bottom Line
The reasons to invest your money are clear. You don’t need a lot to get started and any little bit you save now will help you in the long run. Now that you know how important investing is, where do you plan to invest your extra cash?