How long does it take to double your money? You likely can have twice as much wealth in 10 years, if you invest it in stocks, or 72 years if it goes into a savings account. It pays to understand the math. Everyone says you should invest because you'll grow your money, but let's back up a second and look at how it really works. Stocks are one of many possible ways to invest your money. While the future is never guaranteed, history suggests that they have high potential returns. The long-term average return of the Standard and Poor's 500 Index is about 10% per year from 1928 to 2014. Warren Buffett several years ago, in the aftermath of the financial crisis, said that investors should expect a return of 6% to 7% a year. Keep in mind that these are long-term averages. The market can go down in one year, and you have to wait a couple of years for things to turn around. That's why it's best to invest money that you most likely don't need for several years. The likelihood of achieving high single- to double-digit annual percentage returns is why people invest in the stock market for their retirement. Beyond your emergency fund, why would you put money that you don't plan on touching for 10, 20 or 30 years into savings accounts that can't even keep up with inflation? According to Bankrate, today's average money market rate in America is 0.09%. With inflation rising at approximately 2% year over year, socking away your retirement money into a savings account means you're actually losing money. (What's even crazier, there are new ways of saving that earn no interest at all, such as this new app called Digit.)
Access Investments-Building Awareness - European Union-ROMANIA
Thursday, April 30, 2015
How long does it take to double your money? You likely can have twice as much wealth in 10 years, if you invest it in stocks, or 72 years if it goes into a savings account. It pays to understand the math. Everyone says you should invest because you'll grow your money, but let's back up a second and look at how it really works. Stocks are one of many possible ways to invest your money. While the future is never guaranteed, history suggests that they have high potential returns. The long-term average return of the Standard and Poor's 500 Index is about 10% per year from 1928 to 2014. Warren Buffett several years ago, in the aftermath of the financial crisis, said that investors should expect a return of 6% to 7% a year. Keep in mind that these are long-term averages. The market can go down in one year, and you have to wait a couple of years for things to turn around. That's why it's best to invest money that you most likely don't need for several years. The likelihood of achieving high single- to double-digit annual percentage returns is why people invest in the stock market for their retirement. Beyond your emergency fund, why would you put money that you don't plan on touching for 10, 20 or 30 years into savings accounts that can't even keep up with inflation? According to Bankrate, today's average money market rate in America is 0.09%. With inflation rising at approximately 2% year over year, socking away your retirement money into a savings account means you're actually losing money. (What's even crazier, there are new ways of saving that earn no interest at all, such as this new app called Digit.)
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