5 Reasons to Invest Right Now

Investing is a process that we hear about a lot, although it’s often intimidating. One of the biggest reasons people do not get into investing is the high risk. The flipside of not investing is the risk of leaving your money idle and missing an opportunity to combat inflation while letting your money work for you. Let’s discuss the top reasons to begin investing right now.

1. Fight inflation

We’re all taught to put aside our savings for retirement. But inflation is an effect of the market that not everyone prepares for. The $100,000 you have will only be worth half the equivalent amount in 30 years’ time, because of inflation. So at $5 a plate of noodles, your $100,000 that could buy you 20,000 plates will only get you half when you’re retired.

Investing at a conservative annual growth rate of 2.5% will help mitigate this risk. It’ll make sure that your $100,000 will still get you 20,000 plates in the future.

2. It’s an easier way to meet your financial goals

Trying to save towards the down payment of your first home? Assuming the downpayment is $100,000 and you wish to get that home in 6 years, you will need to save $1,389 per month.

Alternatively, investing at a growth rate of 3% per year, you could reach $100,000 by investing $1,266 per month. If you invest $1,389 per month, you’ll save six months of time, achieving the $100,000 in 5.5 years instead of 6.

Monthly investment	Annual growth rate	Years to reach $100,000 goal
$1,266	3%	6
$1,189	5%	6
$1,464	5%	5

Another major investment goal can be building education funds for your future children. With college tuition climbing, a parent can start investing for future college tuition funds even when their children are still very young. Investing will allow you to achieve more of your goals within the same time period.

If you were to invest at an expected return rate of 6%…

Compared with a 0.5% bank default interest rate

Pro-tip: This was done with our

5. Retire early

A lot of young people want to retire early. This requires them to invest a larger portion of their income in order to meet their goals. The “FIRE” “Financial Independence, Retire Early movement has become a major movement amongst millennials.

Saving and investing a major proportion of income from a young age (as high as 70% of your income) can allow one to retire at the age of 40-45 years, instead of the 60-65 years.