LogFAQs > #956221582

Kind of. Everyone's first priority should be having a decent fund of money saved up. That's the most important thing to do when someone doesn't make a lot of money. You might be surprised at the stats showing how many Americans couldn't survive missing one or two paychecks. Therefore everyone should have some saved in case an unexpected expense or disaster happens.

But after having that base "emergency fund" saved in a safe place, it's great to invest excess money. Keep in mind, most people would consider a 10% annual growth on an investment quite respectable. The last few years have been mostly better than 10% (which might also have fooled some people into thinking they're investing genuises), but historically a 10% annual return would be about average or maybe even a little above average depending on how far back you're looking. If you only had say $100 to invest and then got a 10% return then at the end of the year you would have $110. That same return would obviously look a lot more significant if you were able to start with $100,000. For that reason, a lot of personal finance people would say that the best investment for someone making a lower salary would be to take that money and see if you can use it to make a career change into something that'll give you more money to work with. But then that's easier said than done obviously and depends a lot on people's circumstances.

Also, it cannot be overstated how important compound growth is, which is the type of growth an investor sees in their investment. Google a compound growth calculator and try plugging in some numbers. You'd quickly see how significant investing as early on as you can makes a dramatic difference.

Final note - there are people who will show off their GME and bitcoin investing and whatever and talk about how they turned $100 into $50,000 or whatever. That's not the norm, and if you're fooled into thinking it is the norm and try to get into the next big thing then it's more likely you'll lose your investment. Those things exist, but they are by definition volatile. Some crypto people would be mad at me for saying it, because a crypto-holder has a very strong interest in getting other people to invest in the thing that they've already invested in (because that pushes the price, and the value of their investment, up even more). But I'll leave that at that.

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https://imgur.com/dzGMd