Why Investing Your Bonus Is a Smart Move

In the past year, news from around the world have regularly touched on economic and political uncertainty, with indication that these issues will continue. Keeping that in mind, what should you do with your bonus, if you’re lucky enough to get one? Should it go into your savings, or should you spend it?

Most of us think long term regarding our goals and dreams, but we have the tendency to not consider too carefully the actions that are needed to get there. This is apparent in the financial decisions that we make.

In order to lead the life you want, in the present and in the future, avoid over-spending, especially on expensive items. Upon receiving a bonus, the ideal solution is to avoid throwing it all on a vacation trip, and instead consider putting aside some of it into a new investment such as unit trusts, or add to an existing investment such as your retirement annuity. Keeping updated and informed on some investments and unit trusts that are performing well will help make successful investment decisions for your future.

Below are a few things to consider when deciding how to handle your bonus:

Create Money By Investing Money

The money that you invest will grow over time. Compounding greatly increases the value of your investment, meaning that after a long period of time, the majority of your total investment will come from growth, rather than what you contributed.

Investments Help To Combat Inflation

Inflation greatly impacts your capital in the long run. It is important to consider your cost of living when planning ahead.

You’ll Have More Options

Setting aside some of your bonus for an investment will increase your options in the future, and also protect you from unforeseen obstacles that may arise. Investing your bonus I think is always a great idea, for example because it’s some extra money that you never expected. Investing it into a franchise is a great idea as there are so many different franchising UK opportunities now a days.

It Prevents Buyer’s Remorse

More often than not, we tend to regret making impulse purchases and shopping decisions, especially when we realise that the money could have been used for a long-term investment that will reap better benefits. Our decision lies in the conflict between our current desires and our future needs.

It Is A Positive Move Towards Financial Security

Using some of your bonus towards an investment is a positive step towards financial security, although it might not be readily evident right away. It’s easy to rationalise spending and enjoying your money in the present, especially when retirement seems like a distant concept, but as time goes by, the benefits will become more evident.

Your Patience Will Pay Off

Delayed gratification is an internal conflict faced by people of all ages. It is quite tempting to focus on things that give you immediate satisfaction and avoid long-term benefits that are not apparent right away. However, in terms of retirement, it is important to think long-term and plan ahead. Research your investment options carefully, and make decisions based on your current spending and cost of living expenses, personal objectives, time, and retirement goals. Peruse your options with the help of an independent financial advisor to guide you better.

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