Why Does Investment Matter?
“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”
– Robert G. Allen
Even a wealthy man still needs to invest to protect his assets from depreciating due to inflation. Indeed, the need to invest is higher for those living from paycheck to paycheck.
To understand the importance of investment, imagine you are planning a big event such as a musical concert. There are a lot of tasks that need to be done and very little time to do them. With proper planning, you can start working on the things you need to complete in order to hold a successful concert.
It is similar with life, where important events will come, such as enrolling into a university, getting married, starting a family, and entering retirement. It does not include other needs such as vacations, purchasing a new car or a new home. Those needs could be troublesome if you only rely on savings and a salary without having an established financial planning, particularly if you solely depend on these things:
- Year-end Bonus
- Salary Increase
- Bank Interest
actual value subject to inflation
- Bank Loan
In short, we can prepare for our future needs by taking advantage of our funds today through investment. It can fulfill your short-term goals, such as acquiring new gadgets or traveling with your family, as well as your mid- and long-term goals, such as opening a restaurant, preparing a down payment to purchase your dream home and retirement funds, you can start now.
By looking at the illustration above, you can see that investment is important to accomplish our short- and long-term goals. Investing is not burdensome, because we do not have to change our lifestyle. What we need to do is simply set aside a small portion of our paycheck each month.
After understanding the importance of investment, the next question for you would be: what is the best form of investment? Today, there are already a variety of investment options that could meet your needs, timeframe, and risk profile. Starting from gold, bonds, and stocks to Mutual Funds; all have the chance to be the best investment of your choice.