Why Investing Is Important?

While we work hard to save some money for milestones such as retirement, a home, or college tuition, inflation works against our savings, decreasing the value of our hard-earned dollars daily.  Fortunately, we can overcome this hurdle- but we need to start investing our money and outpace inflation.

The historical inflation rate in the U.S. has been 2.55% over the past 30 years, while the U.S. stock market has averaged 12.8%. Despite several market crashes and recessions over the past 30 years, the difference between market returns and inflation compounds and becomes enormous.

Had you invested $1000, it would be worth $12,401 today (in 1990s dollars); had you put it under your mattress, that thousand dollars would be worth the equivalent of just $447 (in 1990 dollars).

How To Start Investing For Beginners: Step By Step Guide

Before jumping in and investing, we need to take a few essential steps. First, steps 1-3 require getting our personal finances in order before investing.  Skipping these steps is as futile as trying to run a marathon with a 40-pound backpack attached.

Credit-card debt or balances is the number one item you need to eliminate before considering investing.  Average credit card interest rates are often above 14% or even significantly higher.

Step 1: Pay Off All Bad Debt

TOP Dollar Investor

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