Merriam-Webster defines investing as:
Committing money in order to earn an expected financial return
Investing is the #1 most effective way to become rich.
Just by opening an investment account you gain access to the largest moneymaking vehicle in the world, the stock market.
When you invest you make a conscious choice to direct your hard earned money into a product (stocks, bonds, mutual funds) expecting a level of return based on the past performance of the particular product.
Part of the beauty of investing is the miracle of compound interest.
Ben Franklin called it the “eighth wonder of the world”. It doesn’t take a genius like Ben Franklin to see why.
Compound interest allows the value of your investment to grow exponentially over time as you let the money continually earn interest on itself.
The return gets bigger with each passing year.
With compound interest, that $1,000 you save this year can become $2,839 in just 10 years.
When you don’t touch the investment you allow time to do its thing.
You can turn $1,000 into $10,000 without lifting a finger.
If a 20 year old puts $1,000 into a mutual fund returning an average of 11% per year, by the time she turns 50 that money will have grown to $22,892.
If she had waited until she was 30 to start investing she would have only $8,062.
See what a difference just 10 years can make.
So, don’t mess around.
If you haven’t already started investing, start investing now!
Compound interest is by far the best way for you to reach your retirement and investing goals.