The 3 Facts You Should Know About Investing

There are those who are lucky enough to be financially stable from the get go. But for majority of us, we still need to work hard in order to feel secured with the money we keep. These days, the only way to achieve financial security is through saving and investing. These two activities are to be implemented in the long term for us to reap rewards, hopefully after we decide to go into retirement. Here are ways on how you can make your money grow through investments!

  • Through investing, your hard-earned money will give you more money. In essence, investing means that your bank will pay so they can use your money for a given period of time. By allowing banks to use your money, they will repay with interest. In the case of stocks, shareholders are paid dividends- a portion of the company’s earnings on a regular basis. Through investing, your money is generating your more income.
  • You purchase a product or a service using your own money- that which can increase in value. This essentially means that you buy something in the hopes that it will increase over time. When you want your money back, you can then sell it to other people for a higher price.
  • Compound interest is a crucial element of investing. It simply refers to earning interest on the money you were able to save and on the interest that your money was able to earn. This means that a small amount of cash can grow significantly so you can achieve financial stability sooner rather than later.

 

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