Talk to people nearing retirement and they will say they wish they had saved more. According to TIAA-CREF’s Ready to Retire Survey, 52 percent of Americans approaching retirement say they wish they had started saving for the future sooner. Then they will try and convince you that you should save and invest and do all sorts of wonderful things with your money. Your money will compound, they say, at six percent a year. Maybe even eight! You’ll make millions, they say. Just a dollar a day, they say.
Investing has everything to do with goals, but not every goal has to be about crunching serious numbers. Think about why we invest. We invest for short-term goals, like saving money for college and graduate school. Then there are our longer-term goals, like raising kids (a piddling $245,000 per child, according to CNNMoney), to planning for retirement. It is hard to imagine life so far down the line, so know this: Not all of your investment goals need to be about the numbers.
Take the following three examples and you will see how just the practice of investing can lead to a better understanding of the future, and a better future for you.
Understand the Trends
Trends are big ideas, the movements in the economy that shape world markets and affect individual consumers. Some are technology-based, like the prominence of wearable tech, and some are more social, like the rise of organic food. If you invest in a fund that deals mainly in renewable energy, like those mentioned on Renewable Energy World, then you’ll understand the impact of Tesla’s new battery, new fuel cell options and countries being completely independent of fossil fuels. You’ll understand that it’s part of a broader trend shifting away from oil. I know we’re not talking about money, but if you’ve invested in that trend, then you’ll be pretty happy.
As Psychology Today explains, "there are many psychological benefits to being high on the openness dimension of personality," and investing can fulfill many of the six facets of openness, including openness to ideas (thinking about the future success of certain companies is a great way to keep your mind active), openness to action (making investments, in any amount, is a definite step forward) and openness to fantasy (imagining what the world will be like, and engaging with those possibilities).
Engage with the World
By being an active investor, you invest in the world and its outcomes. That applies just as much to those who invest passively through regular contributions to a retirement fund or to an index fund. You can buy into companies you believe in through stock. Be a part of Facebook. Be a part of Chipotle (well, maybe not anymore). If there is an idea, company or person you want to support, you can show that support by investing. Though "skin in the game" is generally for executives within a company, it is also a way for you to say "this is risky, but I believe in it and I’m doing something about it." That personal stake can drive attention and motivate you to stay involved, monitoring the company, understanding what they’re attempting to do in their market and seeing how they will impact the future.
By investing in any amount, over any period of time, you become bolder and more confident as you extend yourself into the future.
By Alex Jeffries Copyright 2016 brass Media, Inc.