The Importance of Saving, Investing and Acquiring Financial Education Early

A Beginner's Guide to the Basics fo Investing and Business. Why save and invest early?

The junior high schools and high schools of America have forgotten to teach one of the most important course of all.  Investing.

What's often left out is

• how saving money from an early age is the key to future prosperity,
• how investing that money in stocks is the best move a person can make, next to owning a house, and
• how the earlier you start saving and investing in stocks, the better you'll do in the long run.

We are taught little about the millions of businesses, large and small, that are the key to our prosperity and our strength as a nation.  Without investors to provide the money to start new companies that hire new workers, or to help older companies grow bigger, become more efficient, and pay higher wages, the world as we  know it would collapse and there'd be no jobs for anybody, and the United States would be out of luck.

In our own schools, we don't teach the basics of how this economic system works, and what's good about it, and how you can take advantage of it by becoming an investor.

Investing is fun.  It's interesting. 

• Learning about it can be an enriching experience, in more ways than one. 
• It can put you on the road to prosperity for the rest of your life, yet most people don't begin to get the hang of investing until they reach middle age, when their eyes start to go bad and their waistlines expand. 
• Then they discover the advantages of owning stocks, and they wish they'd known about them earlier.

There is nothing about investing that a woman can't do as well as a man.  Also, when you hear somebody say, "He is a natural-born investor,' don't believe it.  The natural-born investor is a myth.

The principles of finance are simple and easily grasped.  Principle number one is that savings equal investment. 

• Money that you keep in a piggy bank or a cookie jar doesn't count as an investment, but any time you put money in the bank, or buy a savings bond, or buy stock in a company, you're investing. 
• Somebody else will take that money and use it to build new stores, new houses, or new factories, which creates jobs. 
• More jobs means more paychecks for more workers. 
• If those workers can manage to set aside some fo their earnings to save and invest, the whole process begins all over again.

It's the same story for every family, every company, every country. 

• Whether it's Belgium or Botswana, China or Chile, Mozambique or Mexico, General Motors or General Electric, your family or mine, those who save and invest for the future will be more prosperous in the future than those who run out and spend all the money they get their hands on. 
• Why is the United States such a rich country?  At one point, we had one of the highest saving rates in the world.

A lot of people must have told you by now that it is important to get a good education, so you can find a promising career that pays you a decent wage.  But they may not have told you that in the long run, it's not just how much money you make that will determine your future prosperity.  It is how much of that money you put to work by saving it and investing it.

The best time to get started investing is when you're young. 

• The more time you have to let your investments grow, the bigger the fortune you'll end up with.  But this introduction to finance is not only for the young people.  It's for beginning investors of all ages who find stocks confusing and who haven't yet had the chance to learn the basics.

People are living much longer than they used to, which means they'll be paying bills for a lot longer than they used to.

•  If a couple makes it to 65, there's a good chance they'll make it to 85, and
• if they make it to 85, there's a decent chance one of them will reach 95. 

In order to cover their living expenses, they'll need extra money, and the surest way to get it is by investing.

It is not too late to start investing at age 65.  Today's 65 year olds might be looking at 25 more years during which their money can continue to grow, to give them the wherewithal to pay the 25 years' worth of extra bills.

When you're 15 or 20, it's hard to imagine the day will come when you'll turn 65, but if you get in the habit of saving and investing, by then your money will have been working in your favour for 50 years.  50 years of putting money away will produce astonishing results, even if you only put away a small amount at a time. 

The more you invest the better off you'll be, and the nation will be better off as well, because your money will help create new businesses and more jobs.


Ref:

Preface
Learn ot Earn
by Peter Lynch and John Rothchild
A Beginner's Guide to the Basics of Investing and Business