Why should we invest money?
This is the very first question we ask ourselves. Just hold a minute and think, if anyone would have asked or advised you, what had you thought? As we are humans, we think first negative instead of positive. Therefore, the intention of thinking becomes, it has benefited them from my investment that’s why they are asking or advising us like this.
Dear readers, in this article you will find the top benefits of investing money. It will assure help you decide on the investment and you will get the answer ‘Why should we invest money?’
Investment
Before exploring the context of benefits, we should know what is the investment. Investment does not mean saving money in the bank. Here the investment is the dedication of assets that give something in the return value. Investments also demand a sacrifice of some present assets, time, and effort.
Top 5 Benefits of Investing Money
1. Beat Inflation
In simple words, when the prices of goods and services get increase and a common person unable to afford the same that we call Inflation.
We have noticed that the inflation rate is getting increase rapidly, and it affects every single person who is earning. Because of inflation, many quarrels happen in families. We always try to overcome it to increase our earnings as:-
- We think to establish a startup and take a loan from banks with an interest rate of 12-15%.
- Change job with the expectation of a 30-45% hike in salary.
- Some periods people follow traditional businesses as they do not have money to invest or somewhere feel scared to take a risk.
- Sometimes we do online gambling and look forward to the good luck of the lottery to become rich over a night.
There is no doubt; that there is a risk to investing money in SIP and Stocks but when you do research on any company before buying any SIP or Stocks and take the help of any professional, they will benefit you more than your expected.
As inflation is increase the company’s share price also getting increases. Before investing money in any mutual funds or stocks make a head note as mentioned below:-
- How old company is this?
- Business Model of the company
- Governance of the corporate
- Product of the company and demand in the market.
- Share graph record of the last few years.
- Capital Size.
- Debt.
- Latest News of the sector.
2. High Return
Whenever we plan for investing, we expect a high return. The percentage of returns value depends upon in which sector we are going to invest the money. If we glance at a record of gold for the last decade, we can see how inflation impacted it and if we would have invested. We would get a good return.
| Gold Price | |
| Year | Price |
| 2012 | Rs.31,050.00 |
| 2013 | Rs.29,600.00 |
| 2014 | Rs.28,006.50 |
| 2015 | Rs.26,343.50 |
| 2016 | Rs.28,623.50 |
| 2017 | Rs.29,667.50 |
| 2018 | Rs.31,438.00 |
| 2019 | Rs.35,220.00 |
| 2020 | Rs.48,651.00 |
| 2021 | Rs.48,720.00 |
| 2022 (Till Today) | Rs.52,690.00 |
Note:- Always take advice from professionals before investing money.
3. Small investment, return bulk amount
A well-said phrase in English is “Drop by drop fills the pitcher”. Yes, when we invest a small amount of money every month. We never feel low financially. We can start with Rs.500–Rs.5000/- in any SIP for 10-15 years and it will return like:-
| SIP | Amount. In Rs. |
| Monthly Investment | 5000.00 |
| Expected Return Rate (p.a) | 12% |
| Time Period (Yr) | 10 |
| Invested Amount | 600000.00 |
| Est. Return(s) | 561695.00 |
| Total Value | 1161695.00 |
It is just an example, the return amount may also vary and also depends on the mode of investment. We should plan the finance of our total income by investing 50%, saving 30%, and using 20%. Renowned investor ‘Mr. Warrant Buffet’ also explains that investment is the key to becoming rich and fighting against inflation. But make sure one should not be greedy. Spend and invest money thriftily.
4. Tax Saving
Yes, Most of the people who are crossing the slab of Tax, they do investments to save it. As per the Income Tax Department, investment and expenditure are not part of taxable income. If you are also exceeding the slab, you may save your tax accordingly or start doing investments by today.
5. Meet Financial Goal
Very first we should know what is a financial goal. A financial goal can vary from person to person.
i. Goals of a bachelor:-
-
- Buy Mobile.
- Purchase Bike.
- Paying fees for any professional course.
- Travel.
- Gift for parents or any near or dear ones.
ii. Goals of Married Person:-
-
- Purchase Property
- Education for children
- Buy Car.
- Family Trip.
- Household luxury products.
- Buy Jewelry.
When we think and plan to meet our needs and make our minds to buy anything, it becomes tough for everyone. But if we do a systematic investment plan, it becomes easy therefore the name of this investment is ‘Systematic Investment Plan (SIP)’.
Bottom Line
Everything has pros and cons, therefore do research and analysis before doing any investment. It becomes easy and beneficial once you understand the maximum aspects of it or become educated. There are many intangible benefits that results show us in the future.
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