For about a third of countries, investment choice is not an investment at all. A new survey of more than 1,000 of her adults by GOBankingRates found that 32% don’t work their money for themselves. In fact, there are so many people on the sidelines that there are more non-investors than people invested in stocks, ETFs and mutual funds combined.
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GOBankingRates interviewed financial planners, wealth managers and investment advisors to explain why they invest. teeth And why the 32% who opted out have every incentive to start using what they have as soon as possible.
Some simply don’t have the money to invest, but perhaps more people are sitting on the sidelines because of anxiety than lack of resources.
“A lot of people don’t invest primarily because they’re afraid of losing money,” says Raymond Cuisumbing, a registered financial planner at Bizreport.com. “They may have heard about it on the news or from friends who lost money in the process.”
But historically, long-term buyers have little to fear.
“The U.S. stock market tends to rise about twice every three years, regardless of what happened in the previous year, whether the market was up or down, whether the president was a Republican or a Democrat, or whether it was a leap year,” said John. M. Kennedy said. Jennings, president and chief strategist at the St. Louis Trust and Family Office, said: “This is a good odds, and over time, it means that you can make money sitting on the couch with your investments.”
Otherwise silent thieves will slowly steal you
Anyone who thinks they are protecting their money by risk-averse investing will surely lose their purchasing power over time.
“Inflation is a silent thief, an increase in prices that has averaged close to 3% a year over the past 100 years,” says Russell E. Geyser, MBA, CPFA, financial guides wealth manager. Mr 3 said. . “For money that is not being spent today, it is important that it is at least inflation-proof. If we look further ahead—retirement—smart investing through diversification, rebalancing, and dollar-cost averaging can help people achieve a truly enjoyable retirement.” It helps guide you through life.”
Compound interest – profit on profit – is how the money invested produces more money. But it takes time for the magic to work.
“Imagine a small snowball rolling down a hill and slowly turning into a snow rock,” says Philippe Jantele, financial advisor, portfolio manager and founder of Invest Trading Growth. said. “This is the power of compound interest in investing. Opting out means giving up the chance to turn your modest savings into a large fortune. It lays a golden egg in the form of an increase in the price of .By staying away, an individual misses the opportunity to acquire a wealth-producing bird.”
Investment habits are better than spending habits
As your income increases over time, you can either save new money or spend it. Most people choose the latter, but when an ever-increasing return on investment makes new patio furniture more satisfying than new patio furniture, more income reduces the temptation to spend more.
“It’s easy to get caught up in what I call lifestyle inflation,” said Kendall Mead, CFP at SoFi. “This is when your expenses increase as your income increases, such as a bigger house or a better car. The way to avoid that is to save and invest most of your raises and bonuses. Yes, you can prevent lifestyle inflation and spend less than you do now, which means you’ll need less money to replace your current lifestyle when you retire, and you’ll be able to save more money now, You can invest in it and grow it over time.”
If you are not wealthy on your own or do not come from a wealthy family, in the future you expect to save and grow your money in the present.
“If you don’t invest, it’s very hard to retire,” said Laura Sterling of Own Credit Union in Georgia. “If you start investing at a young age, you are much more likely to retire well than those who plan to wait until retirement. And many investments, such as 401(k) contributions, come with tax benefits not available to traditional savings accounts. may not have enough money to retire in the future.Investing also teaches discipline and better money habits, which can lead to lasting financial success.”
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