8 Reasons why you should invest your money

8 Reasons why you should invest your money

It is important that you should invest your money. Investing helps to grow your money.

But it is also true that not everyone invest their money. Data shows that only 3% Indian invest money in the stock market. This is very less as compared to other countries.

India is a growing economy. There is a great opportunity if you start investing now. India is in the phase where china is 20 years back. Every economist is bullish on the Indian stock market.

The money you invest today helps you to build your fortune.  In this article, we are going to discuss why you should invest your money. These are some important factors.

1. To grow your money

Every time you invest your money, your money grows. The cash you have in your hand never produces anything. Cash has never helped you grow your money.  Your money grows because you get return on your investment.

Suppose you invest Rs1000  somewhere and it gives you an interest rate of 8 percent yearly. At the end of one year, you will have Rs 108. You can see that your money grows.

So it is important that you should invest your money.

2. To beat inflation

Inflation decreases your value of money over time. It eats your investments. If your ROI(Return On Investment) is 7% and inflation is 4%, then your overall return is only 3%.

Rs 100 today would be 96 next year if there is inflation of 4%. The average inflation rate in India in different years:

  • India’s inflation rate for 2018 was 4.86%, a 2.37% increase from 2017.
  • India’s inflation rate for 2017 was 2.49%, a 2.45% decline from 2016.
  • India’s inflation rate for 2016 was 4.94%, a 0.93% decline from 2015.
  • India’s inflation rate for 2015 was 5.87%, a 0.48% decline from 2014

Inflation something you can’t see, but it is always with you.

If you do not invest your money, the money you have today is the same as it was one year ago, but the purchasing power of the money has been decreased.

Inflation is an enemy to the investor. Investor always try to beat the inflation.

Inflation is something that you can’t stop.

The goal of investing is to keep ahead of inflation.

Most people never consider inflation when investing money.

3. To get compounded return

Whenever you invest your money, you get a compounded rate of return. The magic happens when you get a compounded return.

You can only take advantage of compound interest when you invest for the long term.  Time is the exponential factor in compound interest.

Lets see what happen when  Rs 100,000 invested at a rate of 15 % for 30 years.

1st Year – 115,000

2nd Year – 132,250

………….

…………

………….

28th Year – 5,006,561.21

29th Year–  5,757,545.39

30th Year  – 6,621,177.2

You can see your 1lakh has become 66lakh. That’s the magic of the power of compounding.

4. To become wealthy

You have seen how compound interest can do with your money. To get that result one thing you have to do is invest.

You will never get the result when you do not invest.

Every rich person has become rich by investing.

The world 3rd The richest person warren buffet is one of a great investor. He has become so rich just by investing in the right company.

Investing is the only way that can make you rich.

5. To help the economy Grow

We all  have a responsibility towards our country. The money you invest helps grow our economy.

Wherever you invest your money, directly or indirectly you are helping your country.

Every business needs money to grow and investors are those who provide money to them. Do not think that your little contribution can not help.

6. To achieve the financial goal

Set a financial goal that can help you go ahead financially in life. Financial goal is very important.

You can plan your long term and short term financial goal if you invest your money.

7. For your retirement

To have a comfortable, secure, and fun retirement you have to invest your money. You cannot afford to rely on your employer after retirement. You have to take control of your retirement. Plan your retirement.

For your retirement, you can invest in various retirement schemes. Plan your retirement accordingly.

8. To save taxes

Taxes are one of the biggest expanses.

You can reduce your taxable income by investing in various tax deduction options.

Conclusion

Cash Is a bad investment. The value of money decreases over time due to inflation. By investing your money, you can take advantage of compound interest.

Everyone should invest. 

Shubham Pal

A student and an investor. Shubham has a passion for investing in the stock market. He loves to talk about investing, money, and the stock market. He is a follower of Warren Buffett. He loves to read personal finance and investing books.

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