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Chapter 1 — WHY SHOULD I INVEST?
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WHY SHOULD I INVEST?

WHY SHOULD I INVEST?

That is the first question which appears when you are thinking about stocks and ETF’s.

Why Do You Want to Invest

Investing is an important tool for putting your extra money to work. It is a way of saving that provides the opportunity to create wealth faster than by letting your money sit in the bank. We put together some reasons to answer your question “Why Should I Invest?”

STOCK OWNERSHIP TAKES ADVANTAGES OF A GROWING ECONOMY

As the economy grows, so does corporate revenues too. Economic growth creates new jobs, which create income, which create sales. With the salaries getting bigger, the boost to consumer demand is becoming greater, which drives more revenues into companies' cash registers.

STOCKS ARE THE BEST WAY TO STAY AHEAD OF INFLATION

Historically, stocks have averaged an annualized return of 10 percent. That's better than the average annualized inflation rate of 3.2 percent. It means that you must have a longer time horizon. That way, you can buy and hold even if the value temporarily drops. Compare stocks, inflation, and the gold price in history.

EASY TO BUY

The stock market makes it simple to get shares. You can buy them through a broker, a financial manager, or online through the services, such as SprinkleBrokerage. Once you've set up an account, you can buy stocks in minutes. You can also try a virtual trading platform like SprinkleBit.

THERE ARE A COUPLE WAYS TO EARN MONEY

Most investors are trying to buy low and then sell high. They invest in fast-growing companies that appreciate in value. The daytraders hope to take advantage of short-term trends in contrast to buy-and-hold investors who expect to see the company's earnings and stock price grow over time. Some investors prefer a regular stream of cash, they purchase stocks of companies that pay dividends. 

STOCKS ARE EASY TO SELL

The stock market makes it easy to sell your stock at any time. Economists use the term "liquid" to describe that fact that you can turn your shares into cash quickly and with low transaction costs. That's important if you need to get money back fast. Since prices are volatile, you run the risk of being forced to take a loss.

It also allows you to control how your money is used. Investing let you be flexible with your money and choose how much risk you are willing to take. No matter what your specific investing goals are, the main goal of investing is always to end up with more money than what you started with. Keep pace with inflation.

Why Should I Invest?

"How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case." - Robert G. Allen

 

 

Quiz

Investing in stock provides all of the following EXCEPT___?

Correct
Incorrect
0/76 (0%) Correct
  • 1
    Choose the amount of risk taken
  • 2
    Control over how your money is used
  • 3
    Opportunity to create wealth
  • 4
    Guaranteed profits
Submit Answer
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Hey guys! I'm going to be taking this education with you all and give some of my thoughts. If you have any questions, just post them straight on the education page you're on or ask me directly in the Community  

Alexander Wallin, CEO SprinkleBit


Some disclosure mumbo-jumbo:
None of my thoughts should be taken as advice.

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