Are you tired of watching your hard-earned money lose its value over time? Do you want to make your money grow and reach your financial goals? If you said yes, then it's time to consider investing your money instead of just keeping it in cash.
Why Cash Isn't a Good Choice:
Cash might seem safe and easy, but it has some problems. One big problem is inflation. This happens when the prices of things go up over time, and it means your money can't buy as much as it used to.
Imagine you had $1000 in cash a year ago. Today, because of inflation, it would be like having only $943.40. So you lost some real money there.
Right now, if you put your money in a savings account, it might earn about 2% to 5% in a year. But the problem is that inflation is around 6%, so your money isn't really growing. In fact, you're losing money because inflation is higher than what your savings account makes.
Why Investing is Better:
Investing means putting your money into things that can make more money over time. It can help you fight against inflation, make your money grow, and help you reach your money goals.
One common way to invest is by buying shares. Shares mean you own a small part of a company. When that company does well, your shares can become more valuable. Sometimes, companies also give you a share of their profits, called dividends.
Shares have usually done better than cash over many years. On average, if you invested in shares in Australia over the past 20 years, your money would have grown by 9.0% each year. But if you left your money in cash, it would only have grown about 3.5% each year.
Imagine you invested $10,000 in shares 20 years ago. Today, you might have about $56,260. But if you kept that $10,000 in cash, you would only have around $19,778 now.
Of course, investing has some risks. Sometimes, the value of your shares can go down. This can happen if the market changes or if the company isn't doing well. You might even lose some or all of the money you put in. But you can make this less likely by spreading your money across different types of investments.
What's This "Diversification" Thing?
Diversification means not putting all your eggs in one basket. Instead of just buying shares from one company, you buy different things like shares from other companies, bonds, or real estate. This way, if one thing doesn't do well, the others might still do okay.
How to Start Investing:
Ready to try investing? Here's what you can do:
Set your goals: Decide what you want to achieve with your money. How much do you need? How long can you wait? How much risk can you handle?
Plan your strategy: Figure out where you'll put your money – like shares, bonds, or other things. How will you choose what to invest in? How often will you check on your investments?
Get an account: You need a special account to start investing. Brokers or platforms help you buy and sell your investments. Watch out for any fees.
Begin investing: Once your account is set up, you can start buying things according to your plan. Keep an eye on how your investments are doing and make changes if needed.
Remember, investing is a journey that takes time and patience. But if you do it right, it can help you beat inflation, grow your money, and achieve your goals.
Ready to get started? Don't wait any longer. Start investing today and let your money work for you.
Need some help with investing? Reach out to us at 0493 561 023 or email hello@northstarfp.com.au. We're here to guide you on your path to financial success!
Comments