Why Should I Invest In The Stock Market?

If you are already familiar with what type of return on your investment you can expect out of the stock market over the long run, let’s see what investing can do for you.  If you are new to investing and would like to learn more about stock market investing, check out my awesome book on Amazon –  Stock Market Investing for Newbies.  Now, let’s get into some specifics!

Why Should I Invest In the Stock Market?

What you ever stopped to ask this question: what do I really want most out of life?  Most of us get so busy with our day-to-day routines that we often do not take time out to plan where we want to be five, ten, or twenty years from now.

Now, back to the question of what you really want out of life.  I bet I can guess your answer, and I have not even met you!  Here is my guess: All of us want to spend more time doing the things we love and less time on doing the things we do not love.  Is my guess correct?

I have never met anyone who wanted to spend more time raking leaves, cutting the grass, washing clothes, or working in a job they hate just because the pay is pretty good…  Time is our most precious asset.  Once it is gone you cannot get it back.  How can investing help us to achieve the goal of spending more time doing the things we love?

Look at it this way: Investing is simply a tradeoff – give up a little bit today to get significantly larger rewards down the road.  Would you give up $100 today if it meant 40 years from now I’d give you back that same $100?  Of course not!  No one would take that deal.  What if you could give up $100 today to get back $500 in 40 years?  Would you agree to that deal?

Now, what if you gave up $100 today and got back $4,500 in 40 years?  I have a feeling most folks would take that deal as long as our basic needs of food, shelter, and clothing were being met currently!  The whole point of investing is the concept of delayed gratification.  The way compound interest works, the more disciplined one is at putting money aside and not touching it, the bigger your reward will be at the end of the “investing rainbow.”

What’s the Reward of Delayed Gratification?

Sure, maybe the flashy among us who are weekend drivers will buy that $80K sports car.  With easy financing when we were in our twenties or thirties, just about any type of purchase is possible.  However, if we are willing to forgo these types of luxuries and invest the $80,000 instead at an 11% rate of return, over the course of 40 years we would have over $5,200,000!  If we assume inflation remains at 3%, you’d be able to purchase 20 sports cars with that amount of money when you hit your sixties!

The main criticism I hear for investing is that you should enjoy your money while you have it.  “You never know when you’re going to go,” is the most argument argument I hear over and over again.

This is true – none of us know when our lives will end; however, you are much more likely to live until you are old.  If you fail to invest and plan for your retirement, you may find yourself working as a greeter at a big box store.  Is this really the future you want for your sunset years?

Investing while you’re young and forgoing certain luxuries means that you’ll have more money in the bank as you age.  This gives you more options on what direction you want your life to take.  Consider just some of the options available to you if you become an intelligent, disciplined stock market investor versus a spend-thrift:

• early retirement
• fund a your children’s education
• travel the world on sabbatical
• take a career change or go back to school
• start and fund your own business

Why Should I Invest In the Stock Market? – Final Thoughts

The point of this post is to illustrate that having more money gives you more options.  Having more options increases the flexibility you have to take control of your life and live it the way you want.

Learning how to invest in the stock market can be the key to winning back your precious time as your wealth begins to grow over the years.  Having more wealth means that you will be more able to spend time on the things you love and less on the things you do not absolutely love!