InvestmentSavings

Why Should You Invest?

By August 4, 2020 September 5th, 2020 No Comments

As you may already know if you’ve been watching my YouTube videos, my goal is to educate you, and give you the tools to become financially successful here in the US, whether you are American or an Expatriate now living in the US. As always, feel free to reach out to me using my email : theo.desmulier@raymondjames.com or by phone : 407-648-1881.

In the vast complexity of the financial world, there are only two ways to make money: earning income, and investing. Investing allows you to make money by increasing the value of your assets over a period of time. 

Before you consider investing, there are a few financial goals you should aim for, including: paying off debts and building an emergency fund. You should also consider your liquidity. How much can you tolerate investing without compromising your lifestyle? Will you have enough left over (in your emergency fund) should an unforeseen expense — like a medical bill — arise?

There are several types of investment classes including real estate, stocks, bonds, mutual funds, ETFs, REITs, cash & cash equivalents, derivatives, commodities, or any combination of those. Each of these investment types offers different levels of risk and reward. No matter what your goals are, it’s important to diversify. 

Diversification refers to the practice of investing in different asset classes as a method of reducing risk.

Determine your goals

Your goals will be influenced by a number of factors like your situation (age, life stage, income, etc.). Your age plays a huge role in determining the right investment strategy for you. Are you just starting out in your career, settled and beginning a family, or headed for retirement? There are appropriate investing steps that should be taken at each of these stages in order to be well on your way to achieving financial independence. 

Another factor in determining your investment strategy and goals is your income. How much can you afford to save? Do you earn enough to manage your debts, expenses and invest? 

Next, consider your life goals. Are you planning to have a family? Is your career steady, or rapidly changing?

Each of these, and many other factors come together to create a very unique situation that requires a comprehensive investment (and greater financial) strategy. This is one reason why individuals consult an independent financial advisor. Financial advisors analyze your unique situation and make highly personalized recommendations to help you reach your financial goals.

Your investment goals could range from retiring to your dream home and traveling the world, to putting your kids through college, to simply attaining more freedom. One thing is for sure, in order to achieve any of these things, you absolutely need to save and invest.

Why is investing so important?

So why is investing so important?

Saving is like walking. It’s good for you, it’s necessary. But it’s a bit slow, and there are potentially faster ways of getting where you need to go. Investing could be like running. 

  1. Inflation
    You have to keep pace of inflation, around 2% every year nowadays. The value of the money you have in your bank account decreases year over year.
    Ex : back in the day you could buy a theatre ticket for $3, now it’s way more. 
  1. Take advantage of the compounding effectInvesting could allow you to potentially increase your income. If you reinvest the proceeds of your investment, you use what is called the compounding effect, that could help grow the value of your account over time.

I am happy to discuss your situation with you and help you start a financial plan in order to help achieve your goals. Please contact me should you have any questions about why we should invest together. 

Any opinions are those of Theo Desmulier and not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Investments mentioned may not be suitable for all investors. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.