Here’s How Much Money You Lose by Not Investing
When creating your financial plan, make sure you don’t leave out investing. Unfortunately, a large number of people don’t bother to invest their savings, all having excuses for keeping their money out of the market.
If you are concerned about the health of your financial situation for the long term, then not investing is one of the worst things you can do. The best way to understand why this is so important is to learn exactly what you may lose if you abstain from investing your money.
You Need Funds When You Retire
Before getting into the details related to what you may lose if you don’t invest your money, you need to understand the requirements you are going to have in the future.
For the majority of people, the main financial milestone is the day that they walk out of work, never to return again. From that day on, you are responsible for paying all your expenses, even though you no longer receive paychecks.
While Social Security is great, it won’t cover all your needs, especially if you want to maintain the same life you had preretirement.
After you retire, you still have to pay for all your basic needs — this means, food, clothes, living expenses and so on — all on a much smaller budget. The best way to make up for the difference in your income is by having a retirement account. However, if you fail to invest, your retirement account will likely be nonexistent.
Investing $20 per Month: What Happens if You Don’t?
One of the biggest excuses people use for why they don’t invest is because they say they don’t have enough money. However, what they don’t realize is that they don’t need thousands or even hundreds of dollars a month.
Saving just a little can add up. Over time, investing just $20 per month will equate to the following:
- $240 per year
- $2,400 in 10 years
- $6,000 in 25 years
That’s quite a bit of cash. However, thanks to the power offered by the stock market, you may earn quite bit more.
If you took your $240 per year and earned 10 percent each year, then you would have more than $20,000 accumulated at the end of 25 years. As a result, if you don’t invest $20 per year, it is going to cost you more than $20,000. Are you really willing to give up that much?
The Cost Associated With Not Investing Increases With Your Increased Ability to Save
If you are like most people, you are probably spending (at least) $70 on something that you don’t actually need. Why not invest this money? Do you really need cable television? If not, take what you pay and invest it.
There are more than a few low-risk investment options available. Over a period of 25 years, investing $70 per month can help you earn $92,878. This can definitely make your retirement years more comfortable.
Don’t Lose by Ignoring the Power Offered by Investing
The first investment is the most important. If you are like most people, you can probably come up with an entire laundry list of reasons to avoid investing. However, there are about $20,000 reasons why you should start investing $20 per month — and quite a few more to invest more than that.
Each day that you wait or postpone your investing, you are losing money. Stop all this losing and begin making. It’s your money; make it work for you now, and in the future, when it is time for you to retire.