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Why do you need to invest money

Why do you need to invest money

Why do you need to invest money

Why do you need to invest money?

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We don’t study for investment and finance in high school, college, or even at home. If your mother runs a household, money management plays a critical function.

Have you ever heard from the mouth of your elders? 

“Hamre zamane mein toh ye saman itne ka tha”

If you spend Rs.100 on goods, you will not be able to repurchase the same thing at the same price after 2-3 years. The worth of that goods has grown owing to inflation.

Decrease in Purchase Power

It signifies that the value of the 100 rupees you are receiving is greater than the worth of the 100 rupees you will receive in the future. As a result, you must earn a higher ratio in terms of inflation. To beat inflation, you must invest your money in such a way that after deducting fees and additional tax charges, your yearly return exceeds the rate of inflation. If your rate of return is the same as the rate of inflation then you are on a BREAK-EVEN point. This situation is also called no PROFIT no LOSS. 

Save Money to Invest Money

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Savings refers to the money you set away from your earnings. You’re putting money down for the future. Instead of sitting on your money, invest it. It is recommended to use it in order to earn a high return on it in the future. This is referred to as investment. If you want to keep or grow the value of your savings, you should invest them in assets other than cash, such as real estate, government securities, bank FDs, gold, equities, debtentures, and bonds, among others.

Instructions to Invest Money

Savings refers to the money you set away from your earnings. You’re putting money down for the future. Instead of sitting on your money, invest it. It is recommended to use it in order to earn a high return on it in the future. This is referred to as investment. If you want to keep or grow the value of your savings, you should invest them in assets other than cash, such as real estate, government securities, bank FDs, gold, equities, debtentures, and bonds, among others.

Invest Money for WIN-WIN Situation

When you invest money in any financial instrument, you get the product and in return, the other hand gets your money, later on, that money is used for the growth of the economy. 

  • If you invest your money in the stock market, the company gets your money and you get shares of the same company. The money which you have given to the company is used by the company to grow, and if they grow they are going to pay taxes to the government. 
  • If you invest your money in the government bonds, then you get interest on your investment amount on bonds and the government gets your money which they may use to build roads, stations, etc. 

Things you need to consider to Invest Money

The first thing that you need to do is to KNOW YOURSELF in terms of the following points.

  • Risk tolerance.
  • Financial predicament right now.
  • Capacity to absorb a large amount of loss.
  • Funds are available for investment.
  • Investment expertise.
  • The investment time frame.
  • Investing objectives

Well, Investing is a process, not a product. It is personal in nature, which means that it differs from person to person because we all have different goals and risk tolerances.

We hope We gave you some insights into why you need to invest money and delivered it in the best possible way. 

Let us know what do you think about investing money. leave a comment, and We will respond to it. 

DO SHARE THIS ARTICLE with your friends or family.  You can tweet out your thoughts by tagging us @rupayrajat on Twitter.

To your Investing Journey

Cheers

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RuPay Rajat

Making Finance Easy

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