Why do people invest?

RG2015

Flobberchops wrote: »

I invest because I like the idea of free money, i.e. interest, dividends and capital gains. The end goal is a passive income.

Free money is a very interesting viewpoint especially from someone in the banking profession. Interest, dividends and capital gains are as much earned as is a salary.

However, some may venture to suggest that a banker's salary is also passive income.

KNJ_2

Because I like fly fishing, and the two have a lot in common

chucknorris

ams25 wrote: »

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.

I have only just noticed your post, hence the delay in replying, to answer your question, I am approaching the time when I possibly no longer have the longevity left to remain heavily invested in equities and wait for a recovery. Also if what I would have invested already is massively disproportionate to what I could invest after a correction to take advantage of the lower prices, there isn't much point in having most of my investments in equities, if I only have a comparatively insignificant amount to invest afterwards (or the time to wait for recovery).

Up until now I have been focused on growth, but I have now reached a stage in my life where I need to protect what I have, so I can now see the advantages of having significant amounts in bonds and cash (to a lesser extent), even though the net gain after tax is less than inflation (so in fact, a small loss annually). My perception has changed lot in the last few months, as I now realise what I should be aiming for with a retirement portfolio.

trailingspouse

Why do people invest? Because they can.

Investing (other than pension schemes) is something you only think about doing when you know that you have enough money coming in to cover immediate needs and enough to cover future expected needs and enough to cover unexpected crises and enough over and above all of that to make it worth your while investing in something in the certain knowledge that investments can go down as well as up.