by Arjun Wadhwa

Created on: July 29, 2009

Investing is a crucial part of every single financial plan. Without having any income streams, a financial plan is useless. People who make financial plans also want to have financial security. Investing is the solution for providing an income stream and financial security for the future.

Investing (as an income)

If you have made a financial plan, then you must have some financial goals. To achieve those financial goals, you need different streams of income. If you want to build your wealth, and reach your financial goals, then investment is necessary. Investing is one of the best ways to achieve your financial goals. Stock markets are an example of investments that can provide huge returns.

Many financial experts also recommend that you have more than one stream of income. You may lose your job tomorrow, but the investments will remain there. The opposite can also happen during a recession. However, it is unlikely that you will lose both at the same time.

Therefore, investing gives you another income stream to build your wealth. However, not every one needs to invest in order to make money. In the next paragraph, you will find another reason to invest.

Investing (as a security)

Many people invest for financial security. Financial plans focus on the future. Investments can provide that security. You don't have to invest in the stock market. There are many secured investments such as GICs, bonds, etc. These are very secured investments. If you just save your money and put it in a bank account, then you will not be able to build your wealth. Don't you want to save your money to purchase an item in the future? Don't you want to save money for your retirement?

Investing can provide you with financial security if you make the safe investments. You can lock your money in a GIC for 5 years, and get 100% of your principle back. In addition, you will get interest on your money. Inflation causes your money to lose value, and a GIC can help you maintain that value by providing an interest. Most people save for the future, and investing your saved money is the smart choice.

Conclusion

You must have realized now that investing is a crucial part of a financial plan. If investments are not part of your financial plan, then make sure that they are. It is a great source of income and can provide you the financial security for the future.

Learn more about this author, Arjun Wadhwa.
Click here to send this author comments or questions.