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Why Should We Invest

Every single person in a capitalistic economy is running after one single thing, Money. Everyone wants to earn as much money as they can in the least possible time. And out of all this we spend some, we save some. But how many of us really think over what and how much our savings remain after wards?

We focus a lot on how much money we make in the day, but seldom do we focus on how much money we make when we are not working. Yes, the money we set aside for our future requirements need to work too. And it works by the way of investing it in assets. We will count one by one why we should Invest some amount and how is it useful to us.

The number one reason why we must invest our money is Inflation. In very simple words inflation means the rising cost of our daily needs. If we remember that twenty years ago a few thousand rupees were enough for a small family to survive. But today even fifty thousand seems like too less an amount to live a comfortable life. What we see is the effect of inflation on our lifestyle. Our saved money also feels the pinch of inflation. The purchasing power that means the amount of goods that our one hundred rupees will buy today will reduce a lot after ten years. After ten years we will be able to buy goods only worth maybe rupees fifty today. So it makes best case to invest our somewhere other than our pillows where it will be eaten out by inflation, if not by rats.

The second reason is wealth creation. Investing in high return assets makes our money work harder than we do. There are many assets like gold, stocks or fixed income deposits where we can park our saved money. But it makes sense when our money grows or wealth is created where we can actually meet our goals. Though this requires an asset specific approach it is better we start investing in assets as per our needs that help us meet our goals.

Third reason is to meet our goals. Everyone has some goals in life, some of which are very important like retirement and education savings. While some of them are not really important like foreign tour or buying a bigger car, each goal requires you to put aside some money so you can enjoy the benefits of your wealth. Investing can help you reach bigger financial goals.

So in conclusion it is very important that we invest so we can protect ourselves and also get a much better life in future.



This post first appeared on Wealth Note Investments, Share Market Academy, please read the originial post: here

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Why Should We Invest

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