Why do people invest?

Eco_Miser

I started investing because I had more cash than would conveniently fit into accounts paying better-than-inflation interest, and I knew that over the long term investments usually do rather better than inflation.

I'm still investing for the same reason - but with considerably more to play with.

grandst

Storing wealth so future governments can take it and p**$ it up a wall.

reeac

We are retired and, having simple tastes, can never get around to spending all our income. Our investments are all on dividend reinvestment terms and we view that money as being parked there moving gradually further into compound interest territory and helping our grandchildren out in due course

chucknorris

RG2015 wrote: »

Very true, but many investors would be disappointed to only match inflation.

Which is why it needs to be done before retirement, I am 60 next month, but I have made more than enough now, by taking on risk much earlier when I had plenty of years ahead of me to recover any losses. I have recently started a slow process of reducing risk in my portfolio, my target portfolio for state pension age is:

35% equities (much lower than originally targeted)
23% fixed pension (DB/SP)
22% investment property (hold 1.5 properties for at least a decade longer)
15% bonds (try and find a bond(s) paying near net inflation)
5% cash (regular savers, NSI cert, savings accounts)

The above is a moving target which is constantly under consideration.

BananaRepublic

To make enough money to retire early and enjoy life while I am still healthy.

I live a modest lifestyle, my luxuries are craft beer and ice skating. I could retire now aged 54, but I'd like a bit more salted away for safety.

In any case I will retire no later than 60. Could I have done this using savings accounts? Not a chance.

TheShape

BananaRepublic wrote: »

To make enough money to retire early and enjoy life while I am still healthy.

I live a modest lifestyle, my luxuries are craft beer and ice skating. I could retire now aged 54, but I'd like a bit more salted away for safety.

In any case I will retire no later than 60. Could I have done this using savings accounts? Not a chance.

At least the beer stays cold:beer:, but isn't it difficult not to spill any?:D

ams25

I started investing when I was 19. It seemed a natural thing to do as it was something my late father did (although none of my siblings invest). To begin it was just the possibility of making extra money....for no specific purpose but grew into a desire to fund first a property and then early retirement. Starting at such a relatively young age made all the difference....and allowed me quit work at 52. Now i invest to make my funds last 40+ years... as with inflation there is no option but to invest if I want maintain my family's standard of living.

ams25

chucknorris wrote: »

Which is why it needs to be done before retirement, I am 60 next month, but I have made more than enough now, by taking on risk much earlier when I had plenty of years ahead of me to recover any losses. I have recently started a slow process of reducing risk in my portfolio, my target portfolio for state pension age is:

35% equities (much lower than originally targeted)
23% fixed pension (DB/SP)
22% investment property (hold 1.5 properties for at least a decade longer)
15% bonds (try and find a bond(s) paying near net inflation)
5% cash (regular savers, NSI cert, savings accounts)

The above is a moving target which is constantly under consideration.

interesting. If memory serves me right, You've moved from 'bonds are not for me' to 15% (which is about where I am, excluding my future DB/SP). Can I ask what changed your mind. Only asking as I am not totally at ease with my allocation to bonds, but struggle with what else to do. Equities at 55%, balance in cash, property, p2p and absolute return funds.

Flobberchops

I invest because I like the idea of free money, i.e. interest, dividends and capital gains.

The end goal is a passive income - or at least such a heavily subsidised lifestyle that I can afford to take an easy job with short hours. That, and building intergenerational familial wealth. Compound interest works miracles over the long term.

BananaRepublic

TheShape wrote: »

At least the beer stays cold:beer:, but isn't it difficult not to spill any?:D

Practice my son, practice.