Share
Team LXME

Team LXME

This is the first of a five-part series that addresses investments, from why you need them to how you can make them work for you. In our savings-oriented economy, putting money away for a rainy day is a concept drilled into us from our earliest years. Perhaps that made sense when wealth was measured purely in terms of physical assets, but don’t you need your savings to keep pace with inflation? Wouldn’t you rather they helped you meet your life goals?

Here are 4 reasons why you should invest your money instead of just saving it:

1. Goals

Think about why you’re saving. Is it so you can retire early, in comfort and complete financial independence? Do you want to travel the world, set up a business or build your own home? Your dreams will never be more than dreams until you start working to make them a reality. Turn them into tangible goals by understanding where you want to be and how much it will cost to get there. Then, create a saving and investment strategy that will help you achieve each goal.

2. Compounding

Time is your biggest ally in the pursuit of wealth, i.e. not just how much you save or invest, but how long you do it. The secret lies in the power of compounding interest and returns. Compounding can turn even small sums of money into comfortable nest eggs over the years, by adding each gain back into the original pot. This keeps growing and earning higher returns, which get reinvested in turn. Savings accounts also provide compound interest, but typically at much lower rates.

3. Taxation

Why do most investments offer tax breaks? It’s because the government wants you to put more money into the financial market instead of just sitting on your savings. The more funds that individuals put into investment vehicles, the more financial support businesses receive, thus helping the economy grow at a faster rate. If an idealistic desire to help the nation’s economy isn’t reason enough to invest, potential tax savings could certainly take its place!

4. Security

The idea behind ‘saving for a rainy day’ lies in creating a backup plan for financial emergencies. A savings bank account isn’t always helpful, especially if you’re prone to unplanned spending. By investing a little extra every month, you’re creating a safety net for the future while being free to do what you want with the rest of your money. Many investments offer ready liquidity, so you can access funds when needed. At the same time, you’re likely to think twice before cashing them in for frivolous expenses. Investing is nothing more than putting your money to good use, so it can grow at the same rate as (or faster than) your expenses. Of course, certain types of investments are volatile or risky, so do your homework before making any major decisions!

New Investor? Request a Callback.

Fill in your details and we will guide you at every step

    other blogs
    investment vs trading
    Smart Money June 15, 2024
    Investment Vs Trading: Which One is Better for You?

    Trading and investing are often used interchangeably. In reality, the two terms are very different from each other! In this blog, we’ll discuss trade and investment as well as which is more suitable for women: investing vs trading. What is Investing? Investing refers to allocating money with the expectation of generating profit over time. For Investment Vs Trading: Which One is Better for You?

    By Abhibyakti Singh
    Share
    Index fund vs index etf
    Smart Money June 13, 2024
    Index ETF vs Index Fund: Understand the Difference

    Index ETF and Index Funds sound pretty similar, right? Well, there are some important differences between them that a woman investor should be aware of when investing in an index fund or ETF. To simplify this, let’s first understand what index means? An Index is a group of stocks, bonds or any other securities that Index ETF vs Index Fund: Understand the Difference

    By Abhibyakti Singh
    Share
    Small case vs Mutual funds
    Smart Money
    What’s the Difference between Smallcase and Mutual Fund?

    Smallcase has been a trending topic in the past few years. Let’s discuss in this blog, what smallcase is, the difference between smallcase and mutual fund and which to choose between mutual fund vs smallcase. Now let us look at the difference between smallcase and mutual fund What are Mutual Funds? A Mutual Fund pools What’s the Difference between Smallcase and Mutual Fund?

    By Abhibyakti Singh
    Share