Why is it important to invest?

Theory
24.05.2023
10 37 0

Money is needed to spend it. This is clear. But suddenly you save up for something important? Or are you spending less than you earn? What then happens to your unspent money? They depreciate.

Money has a hidden enemy — inflation.

Inflation is an increase in the price of goods. Because of it, every year for the same amount you can buy fewer and fewer goods and services. That is, the real value of money decreases over time. Inflation is in every country and it is constantly changing.

  1. If you keep money at home, then in about 5-10 years the amount will be halved. How? You can buy half as many goods and services with this money, because the prices for them grow every year, and the amount of your nest egg remains the same.
  2. If you invest in stocks, your income will increase as the price of the stock rises. And this means that inflation will not eat your money. And if you choose the right stocks, you will still earn on top or significantly increase your capital.

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