If you want something you’ve never had, you must be willing to do something you’ve never done. – Thomas Jefferson
A lot of people think that investing is just for rich people — that you need a lot of money to be able to buy stocks and hire good financial advisers — but that’s just not true! Today, it’s easier than ever to start investing in stocks and here are 5 reasons why you should start, especially when you feel like you are overworked and underpaid:
Time is Money
Let us be clear about one thing: Successful investing takes time! It’s not magic. Don’t expect your money to grow 5 to 10 times in just a few days if you aren’t doing anything. Investing in the stock market is not a get-rich-quick scheme like what we usually see in coffee shops these days (If you know what I mean, POWER!). Just like establishing a business, there are risks involved in stock trading. But with proper risk management, discipline, and patience, your hard-earned money can grow not just by the thousands but by the millions!How does that happen? Through the concept of compounding interest! Many people have used compounding interest to achieve success in investing, and there’s no reason why you can’t too.
Basically, interest is compounded when the profit you’ve earned from your investment is added to your principal which can now also earn interest.
For example, if you invest Php 10,000 in a stock and it earns 10% interest, you would get an additional Php 1,000. Instead of spending that Php 1,000, you can add it to your investment to increase your capital to Php 11,000. Now if you earn another 10%, you will earn Php 1,100. That’s Php 100 more than what you earned the first time! Just keep doing this—add your earnings to your capital—and your money will grow much faster.
Be a Part-Owner of Big Companies
Whether we want to admit it or not, all of us wish we could own a successful business at some point—to be like the famous tycoons who earn millions every day or even just a small business owner who can manage his own time. At least you wouldn’t have to go to work every day and get paid so little!
But the sad reality is that not all of us will be able to give the time, effort, and money it takes to establish a huge business. Not every business is successful, and even successful businesses don’t make money right away. Sometimes it takes years for a business to start earning, and many of us cannot afford to do something like that. We have other responsibilities. We have families to take care of. So what do we do now?
Well, the answer is simple! You can easily become part-owner of a successful business simply by buying shares of successful companies in the stock market! Be part of their exponential growth—like in the case of Jollibee! Did you know that if you invested Php 10,000 in Jollibee in 1994, your investment would now be worth Php 309,000! Take note: that doesn’t even include the dividends yet! You don’t even need to go through the hassle of owning and operating a business to share in their profits!
Are you familiar with the concept of inflation? Inflation is a general increase in prices and fall in the purchasing value of money. (Source: Investopedia) In other words, inflation is what makes the value of your money go down as products and services become more expensive. This is one of the main reasons why you need to invest your money—because if you just save it, your money actually becomes less and less valuable as time passes.
Let’s look at an example: This 2017, the average inflation rate from January to July was 3.1%. If you put your money in the bank, a time deposit would have given you a maximum of 2-3% interest. That means that the real value of your money decreased by at least 1%—if you could use that money to buy 100 cups of rice before, now you can only buy 99. But if you invested in something like the stock market, you would be in a very different situation. On average, the Philippine Stock Exchange Index* produced a whopping average of 18% annual interest from January 2000 to August 2017—and that’s just the average. You can actually beat that by investing more in individual high-performing stocks!
*The Philippine Stock Exchange index is a collection of the 30 best-performing stocks in the market. These stocks are used to measure the movement and performance of the Philippine stock market in general.
Have Your Dream Retirement
A lot of us have a picture of the life we want to have—a life without deadlines, strict bosses, traffic, and stress. We work so hard and for so many years because we want to save enough money to do the things we dream about. We want to travel the world, build a home, and enjoy new experiences.
Unfortunately, a lot of us don’t realize that just working and saving won’t be enough to achieve these things. By the time you think you’ve saved enough money, you’ll realize that your body has become too weak or that you have other things to pay for—medicines, tuition for your kids, etc. It’s not that these are bad things to spend on, but what we’re saying is that you shouldn’t keep putting your dreams on hold. There’s more to life than working from 9 to 5 until you’re 60, and sometimes you need to step out of your comfort zone to do the things that will make you successful and happy! Through investing, you are not just striving towards your goal, but you are also moving forward at the fastest possible pace so that you still have time to enjoy the fruits of your hard work.
Live Your Purpose
It feels great to help other people, but it also takes money to help other people. Investing isn’t just for those who want to buy cars and houses or go on vacations. The best part about investing is that it can help secure your family’s future and do good things for the people around you. It can help you improve people’s lives—especially in a developing country like the Philippines. Investing can help make a positive impact in the community and that, in our opinion, is priceless.
These are just five out of a lot more reasons for you to start investing. We hope this helped you realize the full potential of the stock market and your full potential as a person, too!
Interested in investing in the stock market? Here are a few links you might want to check out:
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