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Why You Should Invest- $1 Becomes $8.8 Million

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If you take a look at this graph that was charted by Prof Jeremy J. Siegel who is the professor of finance at the University of Pennsylvania’s Wharton School, $1 invested in 1801 becomes $8.8 million at year 2001.

Compared with other ways to place your money, it wins hands down. If you put your money in a drawer and not do anything with it, inflation will get you. If you had put it in gold, it will be worth $19.75 after 200 years. $1 in Treasury Bills, will yield $4575, $1 in bonds will give $16,064.

While no one lives for 200 years, the graph pretty much shows that it is important to invest. If you notice the stock market graph, it registers a decline around the time of Great Depression and also the oil shocks in the 1970s and shows clearly the volatility of the stock market with the graph being the one with lots of peaks and troughs. The rest of the graphs are very much smoother compared to the graph for stock market.

We are living at the moment of one such trough in the stock market. What do you think one should do if you want a comfortable retirement?

You can read about the professor's comments about what the stock market is about.

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