Introduction
Understanding why you should invest
I get asked all the time what people should invest in, but I never get asked WHY people should invest.
Of course, this is the single most important factor which you should consider before making such a big commitment with your finances, and we will briefly explore our thoughts on this below.
Why I invest
I am a 24 year old accountant who has high ambitions for the future, but I do not want to be an accountant until I am state pension age (currently 67) so I need to be financially secure in my future. Not only because I would like to retire early, but also because the current state pension is next-to-nothing and my workplace pension will just about cover my living expenses.
For this reason, I contribute monthly to my Stocks & Shares ISA which allows me to invest up to £20,000 tax-free per year. More on this to come.
What is your “why?”
So now you know why I invest, do you have similar goals, or are you looking to simply learn a new skill?
All reasons for wanting to invest are completely valid, however if you are looking to make £1,000 in a week, this simply is not feasible without touching high-risk, short-term stock trading - which isn’t personally part of my investment strategy.
A few ideas:
Early retirement
Travelling the world
Second home
Family
Wedding
Absolutely any reason for wanting to invest is valid, but you should only ever invest for a minimum of 5 years to minimise your risks. If you want to save for something next year, keep the money in cash as the stock market can be very volatile.
See the best savings accounts on the market here.