People choose to spend their money in many ways. The bulk of most people's income goes for day-to-day living expenses:
A. Food
B. Shelter, and
C. Clothing
But even if you live a no-frills lifestyle, it is important to make some investments for the future. A relatively small sum set aside each year can make an important contribution to your long-term financial security.
The theory behind investing is elementary:
Money not needed now can be invested to produce more money later, which will come in handy when needed.
We all need money, not just for our day-to-day lives, but for bigger plans -- buying a house, a car, a business, etc.
There is one major idea which comprises the philosophy of investing:
The Future Value of Money!
Future value is the sum to which an amount invested today will grow given some appreciation rate.
People invest on the hope or promise that they will receive more money later. Present value is the value in today's terms of a certain amount of money in the future. This is based on some estimated rate-of-return over a long period of time.
When you invest ...
Your money is working for you ...
Rather than the other way around!
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