I’ll tell you why, the stock market is hands down the best way to build wealth and provides the highest return of any investment class.
- When you invest, the interest you earn on your money also earns interest and
your money compounds and grows. This is the magical power of compound
interest, and this kind of growth just doesn’t happen with cash savings.
- Inflation will slowly erode the value of any cash you have just sitting in a
current account or ISA. Stocks on the other hand, over time, rise with
inflation. Why? When you own a stock, you own a very small share of a
business and businesses make things or provide a service which they sell
and make a profit on. If it’s a good business, sales and profits will continue to
rise.
Keep it simple, go for low-cost investing…..
- Invest in a low-cost global index fund/ETF
- Keep costs low to successfully build wealth
Best way to invest? Through an investment platform like Vanguard, Fidelity, Hargeaves Lansdown.
- Compare platform and product fees
This is the percentage of your pot you pay to platforms for managing your money.
You won’t be putting all your eggs in one basket/investment….
- Global Index funds/ETFs are diversified. You are investing in large multi-national companies across
many sectors and located all over the world….in fact, you couldn’t be more diversified!
- The beauty of investing in a global index fund is that you don’t need to sell
your shares in a business if it takes a downturn, the index fund drops poor
performing businesses automatically and replaces them with new companies.