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Why Invest Your Capital: A Beginner's Investment Guide

Start now with small sacrifices and you will reap the benefits in the long run

This is the key to investing for the creation of personal wealth. The idea is to "trick" yourself by doing it now. Why? Because "tomorrow" is never the right time when you are considering the best time to start investing.

"The right moment" talks about the perceived value of things. For example, all over the world, casinos use the same tactic to encourage people to gamble, and they do so by using chips rather than real currencies. This removes the money from its value by creating the illusion that throwing a $ 1000 chip is not so different from asking a $ 100 chip, while wagering $ 1000 of tickets would be a lot more difficult than spending $ 100.

Indeed, in a somewhat similar way, real money can create an abstraction away from what is really important to us and what we appreciate.

What do you really appreciate?

Understanding the need to invest comes first from the knowledge of things that we value. In general, most people tend to give importance to similar things, such as:

  • Family
  • Financial Security
  • Owning a house
  • To be able to retire comfortably
  • A savings account set aside to offer options for the future

Although the above list does not fit your current priorities, you may want to prioritize other wants and needs that require a greater amount of money than you could gain or save. Simply earning a monthly salary might not be enough to cover future expenses. And that is why investing your capital is very convenient.

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Understanding Investment and Debt (Credit) as a Similar Concept

Reinforce yourself by learning basic finances. Newsletters and regular reading of finance or investment blogs will keep you up to date on investment news and prospects while allowing you to invest with confidence.

Investment can be understood as the opposite of debt using the same concept. If you make a purchase on credit, you borrow essentially in the future to finance your current needs. In addition to the debt you owe, you will earn interest based on the time it will take to pay off the debt.

Investments have the opposite effect. If you make an investment, you are withdrawing money from your present by putting it aside for future use, while developing your assets and earning even more.

Let's illustrate this by using another example. Let's say your current car needs a car that costs $ 100,000. If you had the choice, would you rather go back five years and save slowly but surely for your next purchase, or would you prefer to take out a loan for the car and spend the next five years repaying the loan with interest?

It is possible that five years ago, you had not had the foresight to know that you would need a new car in the future, which is why it was 39 would result in no investment or savings for the purchase. In order to enjoy the benefits of an investment, you must understand what you value, set goals, invest in advance and be patient. A comfortable retirement is a common goal that many aspire to, which means now is the time to start investing in your future when you no longer earn a reliable income.

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How much would you be required to invest?

After taking a look at your needs, desires and things you enjoy, the next step is to give them an approximate amount, to give you an idea of ​​your target investment . For example, if your goal is to invest in your children's tuition, calculate your goal by multiplying the education inflation rate (which has historically been 4%) by the current tuition fees, as follows:

Current Schools Fee X (1 + Inflation Education) Number of Years = Future Costs

As soon as you get an estimate of the amount you would need, you can calculate how much you need to start investing in the present.

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Use these three guidelines before starting your investment:

  • Decide what you really like. Knowing the answers to this question will guide you when you save and invest, and help you determine your goals while giving a purpose to your investment.
  • Refuse to go into debt or buy on credit. Although it seems to be the fastest and easiest option to meet your needs, debt can be very expensive and can take years to pay. Investment for a future need is the best option.
  • Estimate an estimate for your goal. Calculating how much you need to reach your future goal will help you understand how much you need to start investing in the present.

Take-Out Food

The best time to start investing is now. Do not expect to have enough money to do it, until market conditions are perfect and so on. No matter how big your initial investment is, the important thing is to start.

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Once you have started driving, keep driving; set aside a percentage of your income for investment purposes. Do it regularly and continuously. This is the key to building wealth and a good way to invest your capital.

A lot of success in your investment business!