The Importance of Investing

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Illustration courtesy Dave Channon
Investing is the best strategy for retirement.

The Importance of Investing

Why should you invest? After all, isn’t it safer to buy certificates of deposit (CDs) or bonds, or just stash cash under a mattress? The short answer is that by investing, you stand a better chance of making money over the long term.

For example, CD rates currently are hovering around 3 percent, depending on how much cash you have and how long you’re willing to sock it away. (Visit www.bankrate.com for a rundown of current rates for CDs.) With rising inflation rates (the 2004 average was 2.68 percent), at best you’re only doing a little better than breaking even, and at worst, you’re actually losing money. That’s because even though you have interest income, those earnings are barely keeping pace with the cost of living, let alone going beyond it. Money stashed under the mattress does even worse because it pays no interest.

  • Published on Jun 1, 2005
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