Having clear-cut reasons or purposes for investing is vital to investing
with success. Like conditioning in a gymnasium, investing may
become hard, tiresome and even dangerous if you are not working
towards a goal and monitoring your forward motion. Here we have a
look at a few common reasons for investing and paint a picture of
investments that fit those reasons.
Retirement
No one knows whether the pension scheme will survive the faring
decades. It is this doubt and the realness of inflation that forces us to
plan for our own retirement. You need simply open the paper to find
out about a company that's immobilizing pensions or a new bill that
will cut off government payouts. In these unsure times, investing may
be a tool to help you carve out a strong path to retirement. There are
three maxims that go for investing for your post-work years:
1. The more years there are between now and your retirement, the
more years your cash has to develop. You have to hold in mind that
you are fighting rising prices when you are planning to retire. Put
differently, if you do not invest your cash to outpace rising prices, it
won't be worth as much in the time to come.
2. The older you are once you begin, the more risk contrary you will
have to be. This means that you'll probably use guaranteed
investments like debt securities, which have lower returns. By
contrast, if you begin young, you are able to take bigger risks for
(hopefully) bigger gains.
