For most people, “investing in the share market” means little beyond either gains or losses. For people focused on “gains,” the possibility of increasing their wealth and generating returns is what drives them to invest.
As you can tell, the “losses” group worries about losing money, so, understandably, they don’t invest in stocks.
However, here’s something to consider: If you invest $10,000 in U.S. shares or Australian shares, you will end up with significantly more money than if you simply put it in the bank. In fact, you could earn almost $220,000 from investing in U.S. shares or $160,000 from investing in Australian shares.
In this post, the best financial advisors from New Wave Financial Planning discusses how not investing can cost you:
The Cost of Not Investing Your Money
Lost Opportunity
The cost of not investing your money can be high.
If you have money sitting in a savings account, it is not doing much for you. In fact, it is costing you money in terms of lost opportunity.
The money you have in a savings account is not earning any interest. Inflation is gradually eating away at the purchasing power of your money. And, you are not even keeping up with the rate of inflation.
The Cost of Debt
The cost of not investing your money is even more significant if you have debt.
If you have credit card debt, you probably pay interest rates of 20% or more. This money could be going towards your future but is instead being used to pay for your past.
And, if you have student loans, you are likely paying even higher interest rates. The average student loan interest rate is around 7%, but some loans have rates as high as 14%.
Missed Opportunity on Compound Interest
The cost of not investing your money can also be seen in terms of your future.
If you are not investing, you are not taking advantage of compound interest. This is the interest you earn on your investments, plus the interest you make on the interest you have already earned.
Compound interest is among the greatest forces financially. It can help you build wealth quickly.
But, if you are not investing, you are not taking advantage of it.
How It Affects Your Retirement and Healthcare
The cost of not investing your money can also be seen in terms of your retirement.
If you are not investing, you are not doing anything to prepare for retirement. And, when you retire, you will likely have to rely on Social Security, which is not a very reliable source of income. You are not taking advantage of the power of compound interest to help you pay for health care costs in retirement.
And, if you are not investing, you are also not taking advantage of the power of compound interest to help you pay for long-term care costs in retirement.
Conclusion
The cost of not investing your money is significant. It can cost you a lot in terms of lost opportunity, debt, retirement, and health care.
Don’t let the cost of not investing your money hold you back. Start investing today. You can seek the help of a financial advisor on the Gold Coast to ensure you’re on the right path.
New Wave Financial Planning can help you structure your finances through the guidance of our best financial advisors on the Gold Coast. Let us help you get started in investing. Contact us today!
