If you have ever been interested in online investing, but not knowing where to start, you should possibly consider learning how. Online investing can be incredibly profitable and is a lot of fun and gives you something to do in your spare time with your savings. Here are some great reasons why everybody should engage in online investing.
To Make Money
Of course, this is the bottom line; this is almost always the primary reason why people have decided to invest online. If you can successfully work out the basics of online investing and do it correctly, it is thought that over a year. You will be able to increase the investment by 7 to 10%. So, this means turning £10,000 into 20,000 in just ten years. Could you do that only by saving? Of course, it might be possible, but that means that you are going without more things because you have to save more. Investing money online allows you to take your £10,000 and turn that into more money, meanwhile anything you have spare you can use for other projects. Of course, this is not a guaranteed thing but provided you work with people who understand the stock market and know what they’re doing there is no reason at all while you shouldn’t turn a profit.
Trending Upwards
It is also worth noting that historically for the last 100 years, stocks have tended to go up. There have been some sticky periods, but at that time, all you need to do is freeze and wait unless things recover. Of course, there will always be ups and downs, but anyone who bought stocks about 50 years ago and sat on them is likely to have made quite a lot of money. It is thought that a stock purchased for $1 in the small-cap market during 1926, long before online investing has now gone up to be worth just under $40,000. The fact that trading online is even easier than it was before this became mainstream also gives you several different advantages.
Cash Can Lose Value
This might sound strange, because £20 is always worth £20, right? Well, yes that is true but what that £20 can buy you is going to vary significantly over the years. As an 18-year-old I purchased my first house in the 90s for £34,000, the same property is now worth £250,000 so, although my £20 has never changed in technical value, what it can purchase has significantly changed. The same thing applies to holidays. I could buy a foreign holiday for £300 at one stage now that same trip will cost me £2000. So, cash sitting around under the mattress is not the best use of your resource. It also isn’t going to achieve much in the way of interest in a bank account at the moment as interest rates are at an all-time low. This is another reason why people decide to take a chance on online investing because they want to grow their money rather than stand still or at worst case lose out.
Best Returns
It is fair to say that online investing is not the only way to invest your money, but generally speaking, stocks will earn more for the investor than some of the other investment options. These include things like purchasing a home or buying bonds. The only one that comes close is the housing market, but at any time we can be in a housing market crash, and potentially not make what you think. It’s not so bad to invest in property if you’re prepared to sit on it as long as it takes for the market to come right, but if you need to sell a property at a wrong time, you could significantly lose out. If you decide to become a landlord and rent out the property, then you may in the long term get more return on investment than the stock market but, this is also a lot of time, commitment, and expense in having an agency to take care of the rental for you. Online investments tend to be quicker, and you will only work with one broker minimising the expenses.
It Is So Easy
Another thing in favour of investing online is simplicity. Stocks are simple to invest in. There are plenty of online trading brokers, and all you need to do is sign up with one of these, and you’re good to go. It does require some research, and you can’t just purchase stocks and walk away, but it is a quick and easy way to trade. Real estate can tie up your money for a long time, and if you need it, you would have to put the property on the market and wait for it to sell, which can take anything between four to five months to many years. Investing in stocks is a liquid asset because they can be converted back to cash quickly if needed.
It’s a Great Retirement Plan
Over the years, we have seen how unreliable pensions can be. The state pension doesn’t offer a lot, and corporate pensions have been caught up in all sorts of scandals where money has been lost forever. Investing in stocks online is a great way to create a retirement plan for yourself. If you start early, you have got plenty of time to get everything in place and begin to make money for the day that you no longer want to work. Done right, you may even be able to retire early.