Remember the childhood days when our mothers gave us a small amount of money, and we used to save a penny for future use? Since we were little, we have been urged to save our pocket money and, subsequently, our salaries. But do you believe that saving can meet our expanding needs? We frequently ask ourselves, “Why should I invest when I can keep saving money?”
The explanation is that saving would not be sufficient to achieve goals like purchasing a home or a car since we require a significant amount of money. Furthermore, inflation tends to make saving easier. Saving money in a bank would not help you in this situation; investing is the best course of action.
Surpass Inflation
A yearly rise in costs and a decline in the purchasing power of your money are both considered signs of inflation. Although inflation rates can vary significantly, they have averaged about 3% historically.
As a result, due to inflation, you will eventually lose some of it each year if you do not invest your money. However, if you decide to invest your money instead of spending it, you might often make up to 7% in return. You can therefore outperform inflation.
Adapt The Plans to Evolving Requirements
A large sum of money is not necessarily necessary for investment. You can put up from 1 to 1,000,000 rupees. One of the main benefits of investing is that you may make your ideas unique.
With the help of your investment manager, create a portfolio of investments that will help you reach different objectives as you go through life. For example, you might favor less hazardous and low-risk investment possibilities as you age. You can modify your portfolio to suit your evolving goals and priorities with proper planning.
Increase Your Wealth
Build your money, indeed. Investing is a clever method to become richer instead of a laborious way. There are countless ways to invest in and increase your money if you are serious about being wealthy. By speaking with your investment manager immediately, create an investing strategy that works for you and your goals.
Meet Your Objectives
The cost of achieving objectives like studying abroad or purchasing a car, among others, is significant. The objectives mentioned above can be accomplished with a clever approach rather than a difficult one. You only need to use the power of compounding through investment to achieve your goals.
Compounding, according to Einstein, is the eighth wonder of the world because it gradually increases the value of little sums of money. Your money’s worth will therefore increase every day if you start investing rather than saving.
Save money on taxes.
Investing is a major advantage. You can reduce your tax burden. The funds or shares you invest money in are not subject to tax in the year you earn them. When you withdraw it during retirement, you must pay taxes on it instead. For the year that you contributed, this saves you a significant amount of tax money. You can choose choices that let you pay tax now and avoid paying it when you withdraw.
“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
–Warren Buffett
-Anupam Badaya
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