Two Ways to Look at Investing
Investing is also about opportunity cost. Investing requires that we give up something today in order to gain something for tomorrow. Take for example the money you will use the to invest. There are probably a million ways you can use that money today from buying a new gadget to a new outfit to having drinks with friends. In many cases, you'll make a decisions that instead of spending this money today, you are going to commit to investing it for the future.
One way to look at investing is to shift your mindset from a consumer to an owner.
Imagine that for every few dollar you spent on stuff, you also bought a share of that stock.
Imagine that for every $250 you spend at Target, you saved money on each trip to buy one share.
Imagine that for every $250 you spent at Amazon, you did the same thing.
Imagine that for every hour you spent on Instagram or Facebook or YouTube or Netflix, you set money aside to invest in those companies instead.
Same thing for Ulta, Nike, Coca Cola, Honda, Michael Kors, Apple, Samsung, Chipotle, McDonalds, United Airlines, Exxon Mobil...
The list is long.
Imagine if instead of all of that stuff around you, you also owned shares of all of these great companies and each time they released a new product that everyone liked, that you like, that you also earned a little bit of the profits because you were an investor.
As an owner and investor, you also have the opportunity to influence the future of companies as a shareholder advocate. We will cover a bit more of this towards to the end so something to think about.
The second way to look at investing is about pre-paying for future expenses. When it comes to retirement, you don't suddenly stop spending money. Investing today means the opportunity to pre-pay your future expenses. This can be housing, food, activities. This can also include pre-paying for children's education.
$200 today can grow to $1000 and can pay for a month's rent in the future.
$200 today can grow to $1000 and can pay for food.
$200 today can grow to $1000 and can pay for your flight to see grandkids.
The list can be endless.
In retirement, you no longer need to work to pay for your current expenses, instead you draw from your investment accounts. Having those funds means you can focus on new projects, new passions or just the time to rest.