A lot of people, both young and old, ask me ‘Why should I bother investing? I can save money in the bank.’ The reason is very simple: you can make more money from other investments. Stashing your money in the bank may be very safe and secure, and it may be easy, but the returns (the money you make) will always be pretty damn low. Your returns probably won’t even keep up with the rate of inflation, so by keeping your money in the bank you will actually lose money over time. That kind of eliminates the purpose of saving, doesn’t it?
There are ways to invest that are still not too risky but give returns much greater than your bank account. If you are planning to invest for your future, would you rather have 11% annual returns, or 5% annual returns in your bank account? For long term savings there is no reason to settle for 5%. The investment that offers average annual returns of 11% over time will fluctuate year-to-year, but unless you need the money right away, short term fluctuations should not concern you. If you might the need money in the very near future though, keeping it in your bank account may make more sense.
A lot of people, particularly young people, tell me that investing is boring or lame, or that it’s something that boring old suit-wearing white people do. I feel like smacking these people! Are you telling me that you are too cool to make money? You are too cool to wear brand-name clothes, have a nice car, a hot girlfriend in the passenger’s seat, and be on the guest list for exclusive parties? You are too cool to have power and influence? You are too cool to be in control of your own destiny and would rather be at the mercy of your boss? I didn’t think so! All of your favorite celebrities who act like they don’t give a you-know-what (because that image sells), in reality are focused and disciplined and have worked very hard to get where they are. You can, and should, do the same. Now let’s get started!
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