Throughout the year, you probably buy lots of gifts for the people you care about (or for yourself!). But the next time you're shopping for the perfect birthday, anniversary or holiday present, consider what you could give to yourself to make a positive impact on your own life.
Opening an investment account, for instance, can help you build a more secure future. If you're not investing yet, here are three reasons you should consider giving your future this financial gift.
Investing now can benefit your future self
You might already be saving money for a goal like a vacation or buying new furniture in the next year. In these cases, you don't have to wait long to put your savings to use. Investing, on the other hand, is setting aside money that you may not use for a few years — or many, many years.
Investing now is a gift your future self will thank you for. In the future you can use these investments to live more comfortably in retirement, help pay for your children's education or meet other long-term financial goals.
In addition to the financial benefit, you'll have a sense of security knowing that, even if there are bumps along the way, you should have more money later in life.
Choosing to invest helps you prioritize
Investing can give you a sense of purpose and intention when it comes to your money.
Think about your current monthly budget. If you haven't analyzed your spending lately, the amount of non-essential spending could be more than you think. Rather than spending money on things that are only temporary, like having meals delivered or a night at the movies, you can invest it toward something more tangible.
For example, say your dream retirement scenario involves enjoying more travel. When you weigh that against a dinner out or another small splurge, it might be an easy decision as to which one feels more important. By focusing on investing now, your money is able to bring you more joy later.
Your money can grow with time
You might assume that you need to invest large amounts of money to grow your wealth, but that isn't necessarily true (article: "Why Investing Isn't Only for the Rich"). While the amount you invest does matter, what matters more is how long your money has to grow.
When you invest, you have an opportunity to take advantage of compounding interest (article: "If There’s One Thing to Know About Investing, It’s This"). This means that when the interest you earn on your initial investment gets added to your total investment, you start earning interest on your earned interest. The longer you have to invest, the more money you can make.
This is an important concept to understand. If you haven't started investing yet, you're missing out on valuable time for your interest to compound. Even small amounts, such as $50 or $100 per month, can multiply exponentially over time if left to grow and compound. When allowed to do its work over several decades, compounding interest can be an exceptionally powerful tool for building wealth.
It's important to put "taking care of yourself financially" on your to-do list. Investing is a gift that keeps on giving, and RBC InvestEase puts investing for your future into one easy package.