Why You Should to Invest? - 867 Words | Essay Example (2024)

Introduction

Considering the liquidity of money and changes in global economies, future investments are one of the surest ways of ensuring the economic sustainability of individuals or organizations. Currently, there exist many uncertainties as concerns the price of commodities, something that translates to money-losing power over time if not well invested in profit gaining opportunities. In addition to uncertainties in global economies that have seen many countries go down the slopes of inflation, many life uncertainties make it necessary to invest whatever little individuals or organizations own to ensure in case unexpected expenses arise one does not remain bankrupt. It is necessary to note here that, although many investment opportunities have many gains, sometimes the whole process is a risky undertaking that requires serious considerations before venturing into it.

Importance of Investing

It is very hard to predict occurrences in the future accurately owing to many changes that occur in life. For example, it is not possible to determine when one will be facing face certain calamities in life. The same case applies to business undertakings; globally there is a great variation in prices of commodities, and owing to the fact that these changes occur every day, it is very hard to plan for some future changes that may result from economic disturbances; primarily inflation. All these factors compounded makes it necessary for one to venture into some investment plans, for it is the surest way of facing many uncertainties and adversities in life. The ability to face the future with uncertainty depends on one’s financial independence. This is because financial independence guarantees individuals an opportunity of securing the future; hence, making individuals be optimists, focused, and goal oriented.

Although all individuals have personal goals that they are always striving to achieve, sometimes lack of enough funds makes the realization of such goals a hard task; a problem that investments can alleviate. Most major purchases require hua ge amount of funds, something that individuals cannot raise at one go; hence, through investments individuals can achieve such goals because invested money grows in value; as time advances depending on the rate of interest. In addition to major purchases, the adoption of the correct investment plan can help an individual to meet not only their goals but also their entire family’s goals. For example, consider the burden and stress associated with children’s school fees. Due to the nature of changing lifestyles, it is very hard to meet this like a demand because it requires many funds, which individuals cannot afford to raise at one go. However, individuals can avoid this through investing for their children’s future; a factor that reduces the stress associated with some extra financial spending.

Considering the rate at which organizational capital goods depreciates, it is advisable for individuals to invest, for this is the only way of ensuring they develop better product potentials for their customers (Importance of investment, 2010, p.1). In addition, it is very hard to predict the customer characteristics such as demands, hence necessitating it for individuals to have alternative investments, which will act as reserves for their extra capital gained. This in many ways is a business security measure for it wiin caseure incase individuals need extra cash to fund or upgrade their business they can easily access them.

The degree of an individual’s wealth depends on how much such an individual has invested. Although most individuals attribute wealth to economic well-being, it is important to note that, wealth has many other social advantages that include respect and recognition from other societal members and security in terms of economic turmoil (Dubey, 2009, p.1-3).

Depending one’s paycheck, life can be very sweet so long as one is still earning; a case that is different when it comes to retirement. The majority of individuals lack a source of stable income during old age due to poor spending habits that they had adopted during their earning days. This becomes worse when these individuals lack a strong supporting family to cater for their needs such as medication and food. Therefore, owing to this fact, it is necessary for individuals to consider venturing into some investment opportunities, for it is the surest way of ensuring they avoid many problems and complications associated with old age.

Disadvantages of Investments

Although investments have many advantages, sometimes they can be a very risky depending on the level of uncertainty involved. Many investment opportunities for example, mutual funds are subject to many alterations in terms of their value, a factor that can cause loses not anticipated; hence inconveniencing individuals. In addition, sometimes because of many economic factors that affect many investments, most investments give individuals minimal opportunities of knowing the value of their investment at particular times; hence, likelihoods of frauds that can result to losses too (Kamlesh, 2009, p.1).

In addition to losses, many long term investments deny individuals withdrawal opportunities incase alterations occur in market prices or instances of goods devaluation is likely to occur.

Conclusion

In conclusion, investments are of great importance hence, a good of way of saving extra earnings for future gains. However, before venturing into any investment opportunity it is advisable for individuals to consider risks involved to ensure their investments remain secure always.

Reference List

Dubey, A. (2009). Importance of investment. Indian Study Channel. Web.

Importance of investment. Syndicate. 2010. Web.

Kamlesh. (2009). Advantages and disadvantages of different types of investment. Bizcovering. Web.