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So, why should YOU consider investing?
Hi, I’m Sam, Market Analyst at eToro, and today we’re going to talk about why people start investing.
Now, investing can be defined in many ways, but for the purpose of this video we’ll define it as committing available money into the capital markets to hopefully get more in the future.
So, in general, three of the most popular reasons for people to start investing are:
1. Mitigating inflation burden.
2. Improving retirement and financial future.
3. Creating passive income.
To explain this, let’s look at some of the numbers.
Over the last 100 years, the stock market has beaten inflation quite convincingly.
While the long-term average inflation number is 3% – The US Stock Market, on average, returns about 11% a year.
That’s a potential growth of 8% above inflation to your investments!
That’s why people may prefer long-term investing over leaving money at the bank, where the low interest rates effectively causes money loss to inflation each year.
Besides beating inflation and creating long-term gains, another key reason why people invest is passive income.
Certain assets can pay dividends which is the profit distributed by companies to their investors on a quarterly or semi-annual basis.
You can look at it as a second paycheck.
Cha-Ching!
So whatever your targets are, whether it’s improving your life quality, gaining financial independence or helping your children out – with the power of compound returns over the long-term it can be beneficial to start as early as possible.
And do you want to hear the good news? We’re living in advanced times.
Today you can open an investment account and invest in fractional shares, which means you can start investing with even $10!
Think about it the next time you’re buying a meal at McDonald’s.
So, what are you waiting for? Join us at the eToro Academy and learn more about how to jump start your investing journey.
See you there!