Investing in the stock market is a way to create wealth — for college, a house, retirement, a cast iron camel collection.
Historically, the stock market has returned an average of 9.8% a year. That’s significantly higher than most other investments. Of course, stocks rise and fall, so you’ll make money or lose money depending on the day. But it’s a smart investment if you’re in it for the long haul, ready to weather the ups and downs.
The sooner you start investing, the more likely you are to build some serious wealth. For example, let’s say at age 12, you start investing your babysitting money of $1,000 a year in the stock market. You do this for 10 years, until you graduate from college at age 22. You never put additional funds in the stock market after that. Assuming your stocks go up an average of 9.8% per year, that investment will be worth more than a million dollars by the time you turn 65. $1,107,393, to be exact.
(If you had put that same money in a mattress, guess how much you’d have at age 65? Yep, $10,000. Assuming no one else found it first.)
* All investments involve risk, including possible loss of principal and does not guarantee future results.