Intro To Investing And Why You Need It

What is Investing?

Investing is when you are devoting something to get something in return. What does that mean in terms of money? Investing is putting money into something to get money back later in the future.

Let us take compound interest for example. Compound interest is making money from money that is put into the bank. If you were to put in 500 dollars with an interest rate of 10% annually, then you would make 50 dollars that year and have 550. The following year, you will earn 10% of 550 which is 55, and have a total of 605 dollars. You are making money from nothing! In this blog post, you will be provided with the importance of investing and how it can benefit you in the long run.

Financial Literacy

Financial literacy is having an understanding and knowledge of how money works and what you can do with it. Being financially literate can help you in many ways, both when you’re young and when you’re older. Having a good understanding of money can better prepare you for financial decisions that you will have to make when you’re older including but not limited to the costs of school, owning property, and bills regarding your health.

Passive Income

Many people think that one of the best ways to get rich is to have a high-paying job where the only way you are getting money is by putting in hours into the job. What if I told you that isn’t the only way? Passive income is when you are making money without exchanging time for it. You can make money from the money you invest without having to put in hours for it (like compound interest).

Generational Wealth

You have probably heard about how people pass down the money and assets they have to their children when they pass away. That is generational wealth. It gives you the opportunity to pass the wealth you have created to someone else. This way rich families stay rich.

Conclusion

Being financially literate and understanding money is very useful to build passive income and have generational wealth. You will be well equipped for the many financial decisions that will be made when you are an adult. That’s why it is best to start learning when you are a teenager.