Reasons to Invest: Why to Invest, Other Than Making Money?

There are many reasons to invest. But, the most obvious reason to invest in the stock market is to profit financially. In simple terms, this happens when the value of an investment increases and is then sold to realise a gain. You can also profit financially by earning dividends or accruing tax advantages. Regardless, the ultimate reason to invest should be to make more money.

Over the past 100 years the global economy has worked in your favor when it comes to stocks. Many individual companies have grown substantially helping shareholders to bank significant returns. Even with recent economic downturns, investing continues to carry a similar potential over the long term. Making money must remain your main reason to invest if you are to capitalize on this potential.

That being said, it’s easy to lose sight of this goal. Investing can be incredibly complicated and making investment decisions is tough. Further, you may find that you have other reasons for investing that can influence your actions and hinder your focus. Do you invest for any of the reasons below? If so, it’s time to take a look at your investment strategy and make sure it’s aligned with the number one reason to invest: to make money.

One reason to invest is to improve self-esteem

Do you want to be a smart business person with great influence? A financially savvy individual who makes lots of money? Many people would answer yes to these questions. Further, people who invest are often portrayed as fitting this image: they are educated people who wear suits to work or day traders on the market floor who spend their day running around, watching quotes change, and making predictions. The assumption is that they are doing their best to make a lot of money in a situation where every second counts. They are at the front of economic change and have great influence.

It makes sense to want to see yourself as someone who invests in the stock market when this is the image that’s portrayed. The reality is some people who invest fit this image, but most do not. The act of simply investing isn’t going to turn you into a smart business person who is financially savvy. Wanting to improve your self-esteem by seeing yourself in this light may cause you to fall prey to poor advice and scam tactics or pay exorbitant commissions. But, the good news is that investing will benefit you financially in the long run if you focus on the main reason to invest: to make money and not get side tracked by wanting to improve your self-esteem.

Another reason to invest is to increase social standing