facebookWhy is it advisable to reinvest dividends from stocks or interests earned from savings than to withdraw them to use? Dont we invest to earn to fund our lifestyle? - Seedly

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Anonymous

22 Nov 2019

General Investing

Why is it advisable to reinvest dividends from stocks or interests earned from savings than to withdraw them to use? Dont we invest to earn to fund our lifestyle?

Discussion (8)

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Shulingg Chen

22 Nov 2019

Scientist at LonzA Biologics

Go for delayed gratification rather than instant gratification! You’ll be awed by the power of compounding interest.

invest, then reinvest to fund your "future" lifestyle

Eric Ong

22 Nov 2019

Project Analyst at 8Bit Global

We love passive income to fund our lifestyle. Hence, I would ask myself if I have enough passive income to fund my lifestyle. If I have yet to reach that, I would reinvest and continue to build up my portfolio, and have a larger passive income moving forward. Ultimately, to reach Passive Income larger than Lifestyle Expense

Paridhi Jhunjhunwala

22 Nov 2019

Associate at Kristal.AI

Hi!

There are basically 2 objectives that you can invest for: growth and income.

If you are investing for growth, you would pick the option of reinvestment as this will help you grow the interest earned as well and there will be a compounding effect.

If you are looking for income, you would pick the option of withdrawing the interest earned and use it to fund your lifestyle. Here, the capital will not grow.

I work at kristal.AI, and it's my passion to evaluate various upcoming investment opportunities.

It depends on whether you want to compound your interest or not. With a long time horizon, compound ...

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