Many people wonder: why invest? Well, the reasons for investments are very clear and simple. Investing or investment makes you to prepare for your future. Nobody wants to work their entire life. Investing is one good option that you can secure your future. Well, you can earn money in two ways by working or by having your assets work for you.
One of the main reasons to invest is that if you keep your money with yourself instead of investing it, your money doesn't work for you. You will only have the money that you have saved. You can invest your money and generate more money.
Here are the reasons to invest:-
One of the main reasons to invest is that if you keep your money with yourself instead of investing it, your money doesn't work for you. You will only have the money that you have saved. You can invest your money and generate more money.
Here are the reasons to invest:-
Focus and get control of your life:-
If you don’t start thinking about money when you’re young, it’s easy to get trapped into living beyond your means. Everyone needs to understand their financial situation in order to decide how much to spend, how much to save and how much to invest. Be deliberate about your priorities. As one woman explained: “I wish someone had told me to start saving when I was 25 years old when I first started drawing a full-time paycheque. I spent everything on clothes and restaurants — what a waste. The sooner you start saving and investing, the sooner you can buy something substantial.”
Become financially independent:-
It isn’t wise to rely on others for your welfare. It makes sense to build your own nest egg while you can and take care of your own financial health.
Attain your goals:-
Whether you dream about buying a new house, new car or saving for the trip of a lifetime, this is your motivation to invest. Lots of people aren’t driven by a need to simply make money for the sake of making money. Investing feels a lot more rewarding when you have a personal goal in mind, and you can make things happen above and beyond what is available to you with a single paycheque.
Inflation:-
Inflation is the rate at which the cost of living increases. The cost of living is simply what it costs to buy the goods and services you need to live. Inflation causes money to lose value because it will not buy the same amount of a good or a service in the future as it does now or did in the past. For example, if there was a 6% inflation rate for the next 20 years, a Rs. 100 purchase today would cost Rs. 321 in 20 years. This is why it is important to consider inflation as a factor in any long-term investment strategy. Remember to look at an investment’s ‘real’ rate of return, which is the return after inflation. The aim of investments should be to provide a return above the inflation rate to ensure that the investment does not decrease in value. For example, if the annual inflation rate is 6%, then the investment will need to earn more than 6% to ensure it increases in value. If the after-tax return on your investment is less than the inflation rate, then your assets have actually decreased in value that is, they won’t buy as much today as they did last year.
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