Why Should You Invest While You're Young?

today to talk about why you should invest when you're young? Well if you think about it today if when you have exist cash and if you thinking about it how to invest it, you have to think about over all rates of return from age 20-25, when you're 65 or 70 when you really going to need that cash, what you going to with it? You have some choices, you can buy a treasury bill today the rates of interest in treasury bills is zero, you can buy longer term treasury bills, 30 year type treasury bills and the rates of interest on those is today is about 2%, you can buy a money market fund by let your cash to set there, you make around 1% in that if anything at all, you can buy medals they go up and down, up and down, and up and down and then unless your trading them like crazy its very difficult to make money.

You could buy a house which would likely be a really good thing to buy for total return but also for stability for your family and that leaves a couple of different alternatives for what you can do, one of which is stock. Over the longer term, corporate profits and companies in the standards of course 500 have increase in about an 8% clip over the, since 1929 and you can type in that data and go and look it up. Our theory from the investment point of view is that if earnings did go up consistently at an 8% clip over the long term, in 10 years the value of what we bought today will be lot more than it is now. Reason is that significantly cash flow results in significantly more value. So why invest today when you're young? It's because you can, you have time to put up with the picks and values that or inevitably come with long term investment, but if you own a company that consistent in terms of stability to deliver that income over the longer term it will be a lot more than it is today and more importantly worth more than assets classes that you can think of