As part of Investing Month on The Australian Finance Podcast, my co-host Owen and I have been going back to basics, to bring our newer listeners up to speed on the foundations.
Which got me thinking…why do I invest? Sure, I want to build wealth, but what is the purpose of that goal? The better you can connect with the reasons behind your goal (your WHY), the easier is is to work out the WHAT, WHERE and HOW of investing, and stay focused on the journey.
Plus, a really good understanding of why you’re investing, helps you deal with the daily ups and downs, and not get distracted by every shiny new object you see.
I invest to…look after future me
I invest by putting aside some of my resources today (primarily my time and money) for more resources, choices and opportunities in the future. This is the ultimate test of delayed gratification, which is not a skill we’re particularly good at.
We can begin to change that by connecting more with our future selves, and recognising that we should give them some priority in our lives. The research shows that if we can find ways to connect with our future selves, it’s easier to start making choices that will benefit us long-term.
I invest to…give myself more choices
I also invest to give myself more choices in the future. While money doesn’t solve every problem, it does make things a lot easier to handle, and often allows you greater freedom over your decisions.
This might include having the financial resources to:
- have a mini-retirement (e.g. 6 months out of the workforce by choice)
- start a family without the stress of paying for bills (because I know I’ve got enough resources to support myself)
- take time off work to look after a sick family member
I invest to…combat inflation
A decade ago, a cup of coffee in Melbourne cost $3.50 on average, and now you’re lucky to get a $5 takeaway. This is called inflation, when the cost of goods and services increases (basically, over time, your money just won’t buy as much as it used to).
This is an important reason to invest, so you can maintain your purchasing power over time.
✅ Your turn: Take some time to think about and make a note on why you invest (or why you don’t). How do you think this currently impacts (positively or negatively) your investing journey?
📈 Investing Month on the podcast
It’s Investing Month on The Australian Finance Podcast, and Owen and I are tackling all those investing basics that you need to take the first step. Get started with our very first episode in the series by clicking the image below ⬇️⬇️⬇️
Over to you!
What is your WHY behind investing? Let me know via Instagram @katecampbellaus
