The stock market is one of the best ways to get money by spending it. To most people, the stock market presents an enigma and a lot of people usually avoid it. Moreover, people believe that the stock market is too risky to invest in. However, the stock market has more potential for growth than any other traditional means of saving money.
For instance, saving money on your savings account nets you a 1 percent of annual growth, while stock exchange can net you an average of 10 to 20 percent. That is if you invest smart and make the right moves. Young people, in particular, can truly capitalise on shares because the earlier they start to invest in shares the more money they will accumulate over time. Here are a few reasons why it’s worth it for young people to get involved with the share market.
Save Money For Something Important
Young people face financial challenges before they even start working. A good example of this are student loans that cover the expenses of uni tuition. However, students spend a good few years of working during and after uni to pay off their debt. Investing in the stock market early on gives young people an opportunity to save enough money to pay off their student loan or even pay for their uni tuition without any difficulties. Forget the HECS debt, you can get rid of that sucker before you know it.
A Valuable Lesson
Investing in the stock market is not without risks. You may end up losing your investment if a company you’ve invested in goes out of business or you may get rich if that company prospers. Picking the right company is difficult but, in time, you will learn to recognise a good opportunity. You’ll need to plan where and how much to invest in, in order to gain considerable profit. If you need any finance advice on this topic, there are agencies that can help you with that. Furthermore, young people can learn how to carefully manage their finances and differentiate good deals from bad ones, by involving themselves in the share market.
Save Money For Something You Want
When investing in a company via the stock market, you may get rewarded by the company via dividend payouts. Dividends are a portion of a company’s capital that you’re entitled to, due to your investment in that company. Each quarter of the year you can reinvest your dividend payouts to acquire more stocks from the same company and increase the value of your investment, use that money to buy different shares of another company or simply spend the cash on whatever you wish. The amount of money you’ll be able to get from dividends again depends on the company’s value and how significant your investment in that company is. However, each time that company’s value increases so does the amount of cash from dividends.
So, is it worth it for you to become involved in the share market? Definitely yes! You have the opportunity to save a lot of money on shares alone. The sooner you start, the more time there’ll be for your investment to grow.
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