The Stock Market: The First Step To Achieving Your Financial Goals
One of the most compelling reasons people invest in the stock market is to grow funds. But how come only a few participate in it? Most people think that you have to be rich in order to invest in the stock market and yet people tend to flock over the release of a new iPhone whose sum could already be an entry to the stock market.
If you keep your money in a bank account and decide to keep it there for at least 5 years, chances are your money has grown a bit through the bank’s annual interest rate, but not enough to beat inflation, which is considered your purchasing power. Five years from now, the dollar may or may not be higher in value than it was today. If in the case it loses its value, your $1,000.00 that can buy an iPhone today, may no longer be enough to buy an iPhone 5 years from now. Your favorite candy bar that costs $1.00 today, may cost $5.00 5 years in the future.
The stock market provides opportunities for you to beat out inflation and rise with the value of your stocks. In January 2005, a share of Apple costs $4.961, in December 2017 a share of Apple costs $169.230 which is about 34 times its cost in 2005, and it will continue to soar as long as Apple maintains its reputation and credibility.
Another beauty of the stock market is compound interest. This is when your investment gains begin to earn money, and then those returns start to earn money, and the cycle goes on. It is interest upon interest upon interest, which your bank cannot give since money stashed in a bank only accumulates on fixed annual interest rates.
Once you get a feel of the market, and you have learned its ins and outs, you will realize that investing in the stock market is fun. It’s your money that works for you. The market develops your analytical skills since you get to assess whether companies are undervalued or overvalued, and in turn you know when to buy and sell stocks.
Everyone has a financial goal, and in achieving it, there are a series of steps one must undergo. One small step could be investing in the stock market.