If you don’t find a way to make money while you sleep, you will work until you die.

Warren Buffett.

Investing is an effective way to put your money to work and build wealth in the long term. Wise investing may allow your money to outpace inflation and increase in value. Whether we are income seekers or capital growth builders, investing is about looking after our future selves.

If you don’t invest, you may miss out on opportunities to increase your financial worth. Of course, you have the potential to lose your money in investments, but if you invest wisely, the potential to gain money is higher than if you sat out.  

You can invest at any age. There is no time limit, the older we get the more risk adverse we may tend to lean, the younger we are the higher risk we can take and the longer runway for compounding we have. If your nearing retirement passive income from investments is a great way to fund your lifestyle. If you are young and earning and don’t need the income, then capital appreciation may be a better choice.  There are no right or wrong approaches, just different circumstances that shape our investing strategy and habits.

Unless you have beaten money and don’t need it (feel free to let us know how), then it is likely one day we may not want to sell our selves for a dollar. Investing allows you to put your money in vehicles that have the potential to earn strong rates of return. Our future selves will thank us for it.

Below are a few pointers on why people invest.

(These are examples and not an exhaustive list).

Why not invest?

That is always my first question, why not invest? Why live in the moment only and not think about the future? The rising YOLO (you only live once) movement may be great…in the moment. However, living in the moment only lasts so long. I am happy to allocate certain income and profit and set aside what I can do without now for something greater in the future. Sometimes I have no answer, if you can do it, then just do it. The answers can come to us the more we implement the discipline.

We will inevitably get older.

One day we may decide we don’t want to work, or perhaps can’t work. I would rather have made some sacrifices along the way to have secured the future me. So, investing and building up a retirement fund is a wise decision. A lot have this as the primary goal, they want to enjoy the golden years after slogging away for so long.

Financial Goals.

Investing can help us achieve financial goals sooner than keeping money idle in a bank account. If we have goals such as buying a house, our children’s education or starting a business then investing is a great way to be accountable to a goal. Having financial goals is a great motivator to help us invest and allow our capital work in our favour towards it.

Inflation.

Inflation is that sneaky area that a lot of people don’t pay much attention to, but it eats into our cash if left idle for long periods of time. Simply put, a dollar now has less purchasing power in the future. With time our ability to buy the same product in a decade or two from now won’t be the same price after inflation erodes the value of the dollar. Investing is a great way to beat or keep up with inflation for our later years. Whilst not the sole focus on an investing strategy it is an important one to keep in mind.

Tax effective.

Investing if structured properly can be a useful tax effective tool. Allowing our investments to compound tax free for decades is a great way to keep more money in your pocket. Long term investment and retirement funds are useful ways to match employer contributions and maximise every dollar earned and allocated.

Freedom and Independence.

Perhaps your goal is freedom, from work, from slogging away for decades. To be independent and make your own choices. This has always been one of the greatest motivations 2^nd to retirement. Investors want to invest diligently now to bring in income or appreciate their capital so they can call the shots in life. Live on their terms, do what they want when they want to. Investing is a great way to help achieve this.

We all have different reasons that define our investing journey.

Why do you invest?