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Investing basics

Why should you invest?

If you’re reading this, then you probably want to learn more about investing. Before we dwell on it, let’s take a look at the main reasons that make investing worthwhile for your future.

Make your money work

There are three great ways you can get returns from investing.

  • First up: capital gains. This is the value of your investments increasing over time. Of course, your investments can also lose value, but that’s the risk of all investment opportunities.
  • Next: dividends. This is money paid out to you at regular intervals as a shareholder if the company is sufficiently profitable. Please note, not every company distributes dividends, and amounts vary depending on the company.
  • Lastly: compound interest. This can generate long-term wealth as you slowly earn interest on your interest over the years. It depends on your ability to be patient.

Limit exposure to inflation

By making your money productive through investing, you can potentially protect yourself from inflation. The general rise in prices of goods effectively causes your money to lose value, especially with historically low bank interest rates.

Of course, it’s important to build up a security savings pot so you can handle any emergencies. However, investing allows you to build up wealth that could grow faster with a higher rate of return.

Profit from rising markets

If you follow the news, you probably see headlines about record stock market prices, but also deep crashes. But despite the short-term fluctuations, the numbers speak for themselves. The S&P 500, which is an index made up of 500 large US stocks, consistently posts strong average returns between 6-7.5% annually.

And you’re in luck: it’s easier than ever to keep up with the news and latest trends. You can stay up-to-date with our Newsroom and read charts that show a stock’s historical performance, all in your BUX Zero app.

Invest according to your values

Maybe you’re interested in a particular sector, such as luxury goods, automobiles, or tourism? You can participate in the growth of these companies by becoming a shareholder.

Investing in a project you believe in and a company you share values with is even more motivating.

So, are you ready to take your first steps? Test yourself with our quiz first!

Test your knowledge

Which of one of these options is usually considered as offering the lowest potential returns?
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?  Having some security savings is a wise idea, but low-interest rates limit your ability to grow your money. On the other hand, capital gains, dividends and compound interest can expose you to higher returns.
?  Having some security savings is a wise idea, but low-interest rates limit your ability to grow your money. On the other hand, capital gains, dividends and compound interest can expose you to higher returns.
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