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.