Improving Financial Literacy: An Introduction to Investing

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Are you satisfied with your income? Do you manage your finances right? Have you thought about how you will spend your future retirement? Let’s discuss this important question of personal finances and what to do to improve the situation.

The world is unstable, this is its main defining characteristic, and everyone realised this completely just a few years ago. But we decide for ourselves how to live in this world because it will never stop changing. Some people live frivolously in pursuit of momentary pleasures and impressions. Others put their pennies under the mattress, afraid to invest or spend them anywhere. Meanwhile, both extremes are fraught with consequences. The first in old age most likely won’t be able to maintain the same standard of living and at least experience disappointment. The savings of the latter will fall in their actual value every year, and after retirement, they will be enough for two or three years at most.

What Is Investment

Investment is the investment of a certain sum to get more profit later. In other words, we give some amount to a business, which, after selling its product or service, returns that amount to us in a larger amount. Investments are not speculation on market fluctuations or gambling on the stock exchange. Nor is it spending on education, which marketing often calls “investing in yourself.” Education, taking care of yourself, spending on vacations or relatives, and even playing online slots for money for complete relaxation after work are all important, but this is about something else, not about investment. Investments, on the other hand, are a way to preserve and increase your capital in the long run by using some of its current portion, but without putting in your own effort.

You can invest money on your own or through intermediaries. The development of the market is always steadily going upwards, despite small fluctuations within a short time. Therefore, the nominal amount of invested funds will increase in the long run, which will play into your hands in the future when it is time to retire.

What to Consider to so as not to Screw up

Experts advise that before you start investing, plan your finances to properly determine the right amount for yourself. To begin with, you should create a safety cushion of approximately two to six months of your expenses. And only then invest, beginning with 10% of your income. Competent building of an investment plan usually implies a further increase in personal income.

Investing is a smart move in allocating your financial capital throughout your life. As a result, by retirement age, we have the means to make a decent living. As well as an extra safety cushion in case of a sharp decline in income. In addition, investing is a proactive approach to life because the direction in which your money will be allocated also affects the economy as a whole, even if it’s a small contribution to a large economic ocean.


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