Why Investing is important?

Share it with your friends

Future uncertainty:

India is the second most populated country in the world with nearly a fifth of the world’s population. Its population growth rate is 1.13%. The average age of Indian is 29 years. As of September 2018, India had 31 million jobless people. Despite being one of the fastest growing economies of the world India has a significant problem of poverty. As a nation, we have completely failed to even fulfill the basic needs of Roti-Kapda-Makaan to every citizen. Most of the employed people are underpaid. They barely save anything in the month end. Competition is so high that one who has Job today can be replaced tomorrow by someone more competent. There is no ‘social security’ available in India. The government no more gives pension to employees in Government Jobs. Future is very uncertain. Financial planning has become so very important in today’s time. Every wise person will tell you that.

Provision for future:

Whether you are a Salaried Individual or a Businessmen, we all earn for our families. Most of us have only one Source of Income. Part of our Income goes into paying bills, buying groceries, paying un-avoidable expenses etc. We also have other liabilities like paying Wi-Fi Bills, Premium of Insurance policies, EMIs of Bank Loans and so on. So once all these expenses are taken care off, we spend the rest of the money for luxuries like watching movies in multiplexes, Pizza party with family, fine dining with loved one, holiday trips and so on. After spending money on everything mentioned above, we are hardly left with some money which we save regularly for meeting future expenses. That money is called Savings.

Let Money Make work for you

To increase our savings we have only two options available, either increase our Income or reduce the Expenses. Income can be increased by either working overtime, finding some additional source of income, shifting to high-paying jobs or moving to another country for currency difference. Expenses can be reduced by cost-cutting, adopting the simple lifestyle, buying only those things which are really very necessary. For normal people, Income minus expenditure is saving. Smart people save first and then spend the rest. It is important to make your hard-earned money earn you some more instead of lying idle. That is where Investing comes into Picture. A cash flow statement is essential to understand how much you should invest. It is important to make regular saving your habit and systematic investment your priority. The investment will generate us much needed alternate source of income. It not only earns a return on our idle resources but also helps us generate a specific sum of money for a specific goal in life. Above all it helps us make a provision for an uncertain future.

For beating the Inflation:

The day you earn your first salary, start your Systematic Investment Plan in a good Mutual Fund. It is important to start investing early. SIP helps you Invest regularly. Choose a long-term Investment plan as it will help you create good corpus in the future. .It is important to allow your investment more time to grow. In long term, it will give handsome returns. Little drops do make an ocean. When we talk about Money, we also talk about Time Value of Money. Inflation reduces our purchasing power. Whenever we Invest we must consider only those avenues of Investment which can beat the Inflation. If we need real returns from our Investment, we should invest in avenues such as mutual funds and equities which have a higher rate of return than the inflation rate. Re-investing your profits and dividends again will increase our capital invested. Compounding and High frequency of compounding of our Investment can create huge wealth for us in long term. So take your first step today.

There is no point in investing in the financial instruments/products which our previous generation invested. Without sufficient risk, we can’t achieve our financial goals. Don’t let the noise of conservative people stop from entering in Market. Gain adequate knowledge and start investing today.

(Disclaimer: Stocksbaazigar Mr. Deepak Doddamani is NSE’s Certified Investment Analysis Professional and NSE’s Marketing Professional Level – 4. This post is for Educational purpose.Thank you)


Share it with your friends
, , , , , , ,

About stocksbaazigar

Founder & CEO @ Stocksbaazigar Founder & President @ Ashwamedh Foundation
View all posts by stocksbaazigar →

Leave a Reply