Right now interest rates are very close to zero percent. That means if you have savings, you can hardly make anything by loaning your money to the bank or the government. Because of low interest rates, buying stocks are worth it now more than ever because for making money with your money, the stock market is just about the only game in town.
Like it or not, it is every person’s responsibility to save money so that they can get by in their later years of retirement. Whether you want to live a lifestyle that includes traveling, golfing, and other fun things or you are content just to stay at home and spend little money, chances are that Social Security will NOT pay you enough to live comfortably on. Thus, you need savings and you need to start early to build it up.
Low Interest Rates = Minimal Savings Income
Years ago, simple interest at the bank paid in the 4% to 5% range. While that isn’t a bad amount, especially because it is risk free, that is about the highest you can ever expect it to go. So even in the best of times for interest income, there is a cap on what you can realistically make with your money. Now that interest rates are essentially 0%, putting money in a bank or Treasury Bills is a waste of time.
The stock market offers people with long time horizons the opportunity to make higher returns throughout their life. That is why learning as much as you can about stock investing is something I strongly advise.
There is risk though, and that is why it is smart to start buying stocks as soon as you can so that you are able to wait out any down turns in the market. The younger you start, the better. I started in my late 20’s and have lived through the market crashes in 1987, the early 2000’s, and 2008. While none of those were pleasant, I never sold any of my stocks during those crashes and in each case the market eventually rebounded as did the dollar amounts in my portfolio.
The Stock Market Is The Best Place To Grow Your Savings
Many stocks pay dividends which come in a quarterly payment to share holders. These dividends represent company profits and is a way of returning excess capital to the owners of the company. It is easy to find stocks which pay dividends between 1% and 3% which in itself is way more than you can get at your local bank. Dividend income is just one of the reasons why learning how to invest in stocks is a good idea.
If you start paying attention to the financial news, you will realize that wealthy people have a good portion of their money in stocks. Not celebrities but business people. The stock market is where many famous business people added to their fortunes and where people who have significant savings invest their money.
There has to be a reason for that and the reason is that stocks pay the highest potential returns. Learning about stocks, the economy, and the business world is something anyone can do and should do. There is no need to be jealous of others who have money: get out there and start learning, saving, and investing on your own!
Buying Stocks IS Worth It!
We live in a country today where people are getting poorer and losing purchasing power. Too many of us struggle to get by with low wages, high unemployment, and rising costs. The number of people that don’t even make enough to pay taxes is staggering. Don’t be one of those people!
Early in life you should learn how to save and most importantly, actually do it! Don’t wait until tomorrow to save. Once you start saving you will then need a place to put that money so that it will grow. The stock market is the best place to do that if you have time on your side.
Buying stocks and putting money in the market is what you should be doing with at least part of your money. Depending on your investing goals and risk tolerance, the percentage of your money in stocks might vary. But one thing is clear, putting long term money in stocks is something everyone should at least explore and learn more about. It is the only way in today’s economy to grow your savings so that you will be able to have a comfortable retirement.