Why Should I Invest?

Dear New Money Earner, 

As always, I hope that you are doing well…physically, mentally, and economically. 

I am very happy that you are making money either through a job or business. Now that you are earning money, you need to think about what you should do with it. It is possible that the first thing that you started to think about doing with your money is spending it on things that you want. Some of these things might include tickets to movies, concert tickets, Starbucks coffee drinks, or a new skateboard. Or, perhaps you want to save up to buy a car. Now matter what you would like to buy with your money, one of the first things that you should consider doing with your money is investing it. 

What is the first thing that you should know about money? 

The first thing to know about money is that money is simply a tool.

It is not something to be loved, or hoarded for no reason. Instead, money is a tool used to get what you want. Money gives you options, including one that I think is so important, which is the ability to help others with it. However, just like any other tool in a toolbox, you need to tend and care for your money. 

Why Should I Invest? 

The short answer: You should invest so that your money has the optimal chance to grow, and hence you have the maximum opportunity to get the things you want in life, including options, both during your working years and in retirement. 

6 Reasons to Invest

1. Our money should be working just like you work. If you put your money to work, it can make money. If you save money, you can make money via interest. However, when you make money via interest, it is only going to be a small amount percentage-wise. Investing allow you the opportunity to have your money earn more money than saving would. 

2. A dollar today is worth less than a dollar yesterday. That is the effect of inflation. By investing your money, your money has the optimum chance to go up in value rather than going down in value. In July 2022, inflation rose 8.5%. That average interest rate on a savings account will not be even near that. While investing may not always beat inflation, it will more likely be at least close to the inflation rate, which means you lose less money than you would if you just keep your money in a savings account.

3. Becoming self-sufficient is an important part of becoming an adult. It is the ability to satisfy your own basic needs. Being self-sufficient can save you money. But, it also makes you less at the mercy of other people’s changing situations and whims. Investing allows you to create more money and even an additional stream of income, moving you closer to self-sufficiency.

4. You should invest in order to avoid running out of money in your retirement. It may not seem like a priority now. But, when you get to retirement you will be very happy that you did not leave yourself vulnerable to the vicissitudes of life. Furthermore, if you invest in the appropriate accounts, you will defer taxes in the years that you earn the money. 

5. Being able to leave a legacy is a blessing. It is one way to have our lives mean something to the world after we are gone. By investing, you are more likely to be able to leave a financial legacy that can make a major difference to your descendants, and/or beneficiaries. 

6. This last reason for investing is one that resonates the most. Being able to help others is empowering. Sometimes you can help others by using your time and hands. However, when you are able to help financially, you are able to help others when you are unable to help physically due to skill or distance. As you build your wealth through investing, you are more likely to be able to help others in a variety of situations. 

Some people believe that you should give one tenth of the money to their house of worship. Other people like to donate money to charities, in addition to or instead of to their houses of worship. No matter who you are, it is likely that you will want to be able to financially help a person or organization at some point. 

For people who don’t agree with my emphasis on giving to others, that’s okay. But, setting yourself up so that you are able to give to others, without falling behind on your own bills, is something that you will greatly appreciate if and when the time comes when you do want to or need to do so. As a mother, one of the main reasons that I want my daughter (and future descendents) to be financially successful is so that she can be generous with helping others in the community. It is a custom of our family, and it is one that I would like to continue and grow. I would like to see all young people to be in a position to be able to give. It helps the community, and it helps the world. But, it will also help your spirit.  

Takeaways:

• Invest in order to allow your money the optimal chances to make more money.
• Invest in order to give your money the optimal chance to grow at a rate to meet or hopefully beat inflation. 
• Invest to be able to become self-sufficient.
• Invest to be able to have money during your retirement, when you will likely not be working for your money.  
• Invest to be able to leave a legacy for your heirs.  
• Invest to be able to grow your money in order to have more to share and help others in your community.  

Bonus:

Some people will tell you to enjoy your money now, while you are young, and start investing later. There is no later when it comes to investing. Start now. Plant the seeds now, in order to be able to enjoy the investment fruits later.

Money in itself does not make one happy. It’s the relationships and having a sense of purpose that brings happiness. But, when considering the entire tapestry of life, money is indeed one of the threads. 

May you have all of the threads, including money, to create a life tapestry of great beauty.

Much Love, 

Rich Mom

One of my favorite ways to invest is through the stock market. 

If you are interested in starting to invest in the stock market, feel free to use my Robinhood link. I love the Robinhood app, and I use it every day. 

Robinhood is giving away free stock when you sign up for an account. 

If you use my Robinhood link, I may receive a small payment. But, it will not cost you any additional money. 

I appreciate the payment that I may get, because it helps to cover the cost associated with producing this blog. Thank You!

Want to learn more? Here’s another Rich Mom, Poor Kid post:

Uh-Oh! Did You Forget Everything That You Learned in Your Financial Literacy Class?

Ten Secrets to Building Wealth

5 Stocks to Buy Your Grandchildren

I want you to be:

Young, Building Health & Wealth

I am not an investment advisor. Always do your own due diligence and research before investing. Check with your own investment advisor. 

Also remember that past performance is not a guarantee of future performance.