Why Investing In Stocks Is The Answer
No matter how much income you are able to generate and save. Most of your financial goals will only be accomplished when you turn your savings into investments. There are all sorts of vehicles for investments. But stocks have historically been the asset class that offers the best returns. It might be risky at first when you are new to it. Once you get the hang of it, it becomes fairly simple and automated. You can only generate so much return from risk free investment vehicles like cash deposits or treasuries. To truly achieve financial freedom, and your financial goals you ought to invest in riskier things. Nobody has become truly rich, by simply investing in treasuries.
Why should you invest in stocks?
Nobody reaches financial freedom by simply putting all their savings into cash deposits. The return on your money will be extremely low. In fact so low that it will barely keep up with inflation most of the time. In this case you are essentially losing purchasing power. This unfortunately is a common practice among many people. Stocks tend to appreciate overtime, in fact stocks are the best asset class when it comes to returns over the long-term. Now it all comes down to what stocks you choose. You need to know how to value a stock, in order to correctly invest in it. This allows you to determine your possible upside as well as your downside. Knowing how much you can make, and how much you can lose is an important part of the process.
Rich people hold assets, they don’t hold money
Money depreciates overtime, due to inflation. Holding a large part of your net worth in cash might seem like a good option but it is actually detrimental. Over the long-term the purchasing power of your money decreases, and that is why it is important to focus on investing. For that reason, and not only to protect your purchasing power, but to increase it you need to invest in assets. Stocks seem by far the best option. There are cash cow stocks that consistently provide you with income to pay your expenses. Learn how to choose the best stocks, and start building your portfolio.
Although treasuries and corporate bonds are safe investments, to really increase the value of your investments you need to start taking more risks. You don’t want to take too many risks but there are certainly some interesting stocks you can consider. That offers safety and returns at a small risk.