It is natural that if a person has some money, they would like to see it grow. However, most of the younger generations of our country are knee deep in debt by the time they graduate from college. Major portion of their income will go towards the repayment of debt. So, literally speaking, they do not have much money with them with which they can invest and pull themselves out of the rat race.
But hey, No need to get upset. Because it is possible that you can invest your money even if you owe loads of money to Mr. Banker. Here is why we think that it is perfectly safe to invest while you are stuck deep in debt.
You Can Pay Your Bills through Returns of the Investment
Not investing just because you have a mountain of debt is no excuse because you can invest your money in risk free securities and even risky securities topay off your debt gradually from the returns that your investment produces. It is, however, recommended that you consult a financial advisor before you start investing your money because he can construct for you a diversified portfolio, one that will fulfill your financial needs. A diversified portfolio of investment will have low risk thus it’d be safe to invest your money in it.
You Will Learn Money Management
Managing money is a science and if you are fresh off from college and deep in debt then probably this is the skill that you should learn because it will help you in the rest of your life. According to the statistics collected by the Parliament of UK, the current value of outstanding student loan is £10 billion and it will increase in coming years. So it is crucial than ever before that you learn to invest your money as it will help you in learning money management skill and will also help you in becoming financially astute that will improve your odds of becoming financially independent and paying off your student loans at an early age.
It’s Safe until You Manage Your Risks
Investing is considered as some sort of voodoo among those who haven’t got a clue about what it is. These people are the ones that create a fear in peoples mind that they’ll lose all their money if they are to invest it in the financial markets. In the financial markets losses are usually suffered by those who are highly geared i.e. the ones that have taken a lot of leverage but if you follow the principles of risk management then you’ll be able to make crazy amounts of money and payoff your debt faster than you would have paid through your paychecks.
If You Are Young Don’t Play it Safe
‘Is it safe to invest while you are knee-deep in debt?’ what kind of a crazy question is that? Remember kiddo there is no such thing as safe in this world. Your investment will have a high probability of being safe if you follow the above mentioned rules but in the end probability is just a probability.
So, invest the money that you can afford to lose.…Read More