A good investment is needed for your rainy days, says advisor
By not investing or not investing properly, it could also mean that you will also have to work for more years than you had anticipated.
An investment is an asset that is acquired with the goal of generating an income or appreciation.
Local Financial Advisor, Tshepo Maubane explains says in layman’s terms, an investment is the purchase of goods that are not consumed today, but are used in the future to create wealth. “You are basically saving for the future, which is important.”
He adds that an investment is a monetary asset that is purchased with the idea that the asset will provide income in future and will later be sold at a higher price for a profit, such as buying a house or flat to rent or sell.
Investing is important, if not critical, to make your money work for you especially for when a rainy day arrives, is his advice. “Now with the lockdown, many people are falling back on their investments and savings as a safety net, since they are unable to work. The situation could have been dire for them had they not had the option. You should always have a backup plan. Investments allow us to have something to fall back on.”
“When we work hard for our money, it should work hard for us as well for when we need it the most. I’m actually glad that as a country, we had to go through lockdown, because for some people, this phase will be a lesson learned that investments are crucial during difficult and tough times.”
By not investing or not investing properly, it could mean that you will also have to work for more years than you might have anticipated as you will have to pay off debt. When taking investing seriously, the returns generated from your investments can provide financial stability in the future, he advised.
Investing, according to Maubane, is often confused with savings. “An investment is generally different from saving as it is a more active way of deploying your wealth. Saving is generally understood as storing a part of your income without having to worry about where you are deploying your surplus funds.”
For beginners, Maubane advises buying a portion of a company or a commodity with the belief that the value of the asset will grow over time. “Remember that investing is not a ‘get-rich-quick scheme,’ but rather, a way to consistently grow the wealth you already have. The good news is that even though investing is a way to grow your wealth, you don’t have to have a lot of money to get started,” he added.
He concluded by saying that having financial investments is important as investments can help you beat inflation, save for retirement, put your money to good work and serve as additional financial resource.
