How Investing Can Benefit You in the Long Run

When you hear the word investing, what comes to mind? If you’re like me, you probably don’t know much and just have this idea of people in business suits running around Wall Street monitoring the stock market, eagerly waiting to see if they are going to become millionaires or lose all their money. Although it might seem like a very complex thing to do, investing your money has many benefits and you don’t have to be a Wall Street millionaire to do so.

The main reason you can make money investing is because of something called compound interest. The simplest way to convey the power of compound interest can best be seen through the chart below, provided by the The Motley Fool article titled “Why should I invest?”.

The chart below shows how a single investment of $100 can increase over time. The different return rates at the top correspond to different forms of investing. The Motley Fool states “5% is what you might get from a certificate deposit or government bond, 10% is the average stock market return, and 15%-20% is what you could get from picking your own stocks to invest in” (1). As you can see, the earlier you start investing, the more money you can possibly make by your retirement.

Investing Chart

But how do you start investing? Where do you buy and trade stocks? Do you have to constantly worry about monitoring the stock market? Thankfully in today’s world, there are many ways in which you can start investing. “Robinhood” is a mobile app that allows you to buy and trade stocks without charging you any fees. You can invest in large companies such as Tesla or Microsoft or even smaller startup companies. This application is best for people who want to research company’s and monitor their stock values during the week. If you don’t want to research and constantly monitor the stock market you can try automated investment apps such as “Wealthsimple” or “Wealthfront”. These applications invest and manage your money for you. You can deposit a couple of dollars a month and the applications will buy and trade stocks based off questions you answer when you sign up. “Wealthsimple” allows you to open an account with no minimum balance whereas “Wealthfront” requires an account minimum of $500. Both apps have their pros and cons and charge a management fee once your portfolio (account) has reached a certain amount of money.

Like many things in life there are risks when it comes to investing, but thankfully there are many apps and resources on the internet that can help you expand your knowledge and understanding of basic investing. So, what are you waiting for? investing has many benefits and through practice, research, and proper investing habits, you could make a lot of money by the time you retire.,

Best regards,

Gabe, LeopardCents Ambassador

Works cited

Staff, Motley Fool. “Why Should I Invest?” The Motley Fool, The Motley Fool, 16 May 2008, Accessed 3 October 2018.

 

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