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5+ Reasons Why You Should Invest In Stocks

by Udemezue John 4 months ago in tech / how to
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Reasons Why You Should Invest In Stocks

5+ Reasons Why You Should Invest In Stocks
Photo by Maxim Hopman on Unsplash

Stock prices fluctuate throughout the day, but investors who own stock hope that the store will increase in value over time. Not every company or stock does so, however.

Companies can lose weight or go out of business entirely. When that happens, stock investors may lose all or part of their investment.

This is more reason why investors need to do thorough research about the companies they intend to invest in and a wise act to spread their money around, buying stock in many different companies rather than focusing on just one.

Stocks carry more risk than some other investments but also have the potential to reap higher rewards. Stock investors earn money in two main ways:

1. Hold and Sell Method – If the price of a stock goes up when they own it, and they sell it for more than they paid for it.

2. Through dividend – A dividend is created to allow you receive regular payments from a particular stock or more. Not all stores pay dividends, but those that do typically do so quarterly.

1. Invest in Stocks to Grow Your Money.

While starting a business might not be easy to grow your money, you can also invest in stocks and begin raising your cash right away.

Investing in stocks can help you grow your money by over %10 in the long run.

The Bottom line is that you can turn $10,000 per year into more than a million dollars over 30 years through regular investing.

Now, $300,000 of that million dollars is the money you directly invested each year. But the other $710,730 is money you made from investing in stocks.

The critical point is that investing in the stock market can make your money grow much more significant over time. And this remains the number one reason people invest in stocks.

2. Invest in Stocks Because Money Sitting in the bank Will Lose Its Value over time.

Inflation is one of the enemies of currencies worldwide, causing them to decline each year drastically.

Think of inflation as the slow but steady force that makes things cost more over time.

Back in the days in a country like Nigeria, the cost of travelling overseas from Nigeria was more petite than N70. Still, with insufficient government policies created to kill businesses, inflation went up. As a result, it brought down the economy, causing the cost of goods and services to go up, manifested in currency devaluation.

What that means for you is that your hard-earned money is slowly losing its value over time.

For Example, if you save $10,000 this year and put it under your piggy bank for the next 30 years, it won’t be $10,000 when you take it back out; it would have devalued.

The fact remains that when you have dormant cash sitting in a bank waiting to be put to use in future, then such an amount of money would be devalued.

Since 2000, the annual inflation rate has been between 1% — and 4%. That means your money’s buying power erodes by 1% — 4% every year.

Investing in stocks can help the value of your money escape inflation and appreciate over time.

3. Investing In Stocks Helps You To Grow your Investment.

With the evolution of the stock market, building a brick-and-mortar business has become obsolete.

You don’t longer need to have a business idea or even think about starting your own business before you begin to make money.

Stocks have earned more wealth for investors than most other investment options. On average, investors in the U.S. and worldwide have profited more from buying stocks than any investment initiative.

I am not asking you to throw all your savings into buying stocks at once without proper education because if you do that are possibilities that you are going to lose money.

Owning stock does not replace starting your business if you have the idea.

4. Investing In Stocks Is One Of The Easiest Thing To Do.

All you need to get started with stock is a working knowledge of how the stock market works and a valid stockbroker offline or online.

If you are fortunate enough to have some savings and possibly have some money to spare, then investing in the stock market is a good idea.

Owning your first stocks has become relatively easy with the digital revolution; all you need is little cash sitting in your bank account, a smartphone/computer, sign up with an online trading broker, click a few buttons and buy some stocks.

Make sure to spend more time studying trends worldwide to make sure you don’t end up buying the wrong stocks.

You should also know that Stocks are often called “liquid assets”, which means they can be turned into cash relatively quickly.

Most people invest in stocks because they feel like they can call their money back home whenever they want.

For Example, if you had $5,000,000 invested in the market at 3 pm on a Tuesday and wanted to get all your money out right away, you could most likely turn that million dollars into cash in a few minutes with just a few clicks.

5. Invest in Stocks for Income Diversification.

Do you have an active business and want to add more income streams to the book? Then, investing in stocks is not a bad idea because it can help you diversify your income streams, whereby you have various options to make money from.

The more ways you have to make money, the less you risk getting in financial trouble if anyone’s method gets disrupted.

For Example, let’s pretend that you have a full-time job, own a real estate business or dive into the stock market.

When life happens to one of those income streams, you are likely not to lose all at once because one of these income streams will stand up for you. Stocks can be another type of investment, diversifying against potential trouble in one area.

6. Invest in Stocks So You Can Own Part of a Company You Love.

You’re officially a part-owner when you buy even a single share of a company.

This makes you entitled to a specific part of the company; let’s assume you buy a stock in Apple, Inc, then Tim Cook, Apple’s CEO, legally works for you.

Are you passionate about specific brands, and do you aspire to own part of the company? Then buying stocks helps you achieve that. For example, if you buy Apple (AAPL) stock, you’re the company’s owner.

7. Invest in Stocks to Learn.

So many people always find themselves making the wrong decisions in life; the good news is that investing in stocks will teach you a ton!.

You get to understand how the stock market works, how companies succeed or fail, how products come to market and how economies impact companies.

You also get to learn about companies and products, analyze CEOs and company leaders, and make essential decisions that can significantly impact your financial future.

Plus, You will learn to think in new ways. For example, investing in the stock market requires logic, analysis, and thoughtful reflection.

Having these skills as an individual makes you strong enough to make hard life decisions.

I wrote a comprehensive guide on how anyone can invest in stocks wisely, check out the link to the article to learn more.

  • How To Invest In Stocks And Make Money

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About the author

Udemezue John

Digital Nomad currently blogging about marketing and internet of tings on https://tchelete.com

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