Investment - A Process to put the money at Work
Money is one of the words that everyone knows across the world. It's because it is required for our life survival and anything that we buy require money to be used for transaction purpose. When there was no money at that time the barter system was used and this has improved over the period. Now with the advancement of technology things have grown and gone to the next level. Money management is highly advanced and backed by technology these days which allows us to use our money conveniently.
While we know that money is something we all tried to have more of because the more money we have then we can do better things and even can plan a better future for ourselves and our families. Having more money means we can manage our responsibilities better which drives us towards a better future This is why we all work to earn money. But earning is not enough because we also need to put the money at work so that it earns for us as well. Inflation is one of the terms that keeps on reducing the value of the currency and This is why whatever money I have now will not be having the same value after a decade.
In India, we learn the habit of investment from childhood because we see our parents doing the same and as a kid, we also learn it. I have seen my parents investing in traditional investments instrument and my mother is specially used to investing in gold. My father was used to investing more in banking because he was familiar with this however my mother was not less than him because she was not good at banking but still she can accumulate a good amount of gold. Although now we have so many platforms offering better ways to invest money and it was all not available 20 years back but it's still the mindset that people had remains the same save the money and invest for a better tomorrow.
I have been following the same since my graduation days and there was a time when why was a full-time investor in gold jewelry but things have changed since that time I joined crypto. Most of my investment now goes into crypto however still I invest in gold jewelry at least once a year and sometimes twice because for me it's an emotional investment and I do not want to stop it for any reason.
now I understand that investment from the inflation point of view but trust me that until five years back I was not aware of all these terminologies. I used to invest in gold because I wanted to have more and for a girl, gold is something that the more we have the more we want to have. Whatever I have invested in the gold is still with me and to be honest, I do not want to sell it just to put a profit I know that this is not the right way of investing but that's how it is with girls, especially in India.
In the last few years, I have learned that it is very important to invest money. For example, the inflation rate is 7% in a year and if we invest the money with less than 7% then the value is going down and if we can earn more than the inflation rate then the differential is the only value appreciation we can achieve in a year. So if anyone thinks that he has got so much money as of now and does not want to invest but wants to keep the Fiat with him for the next 10 years then as for the current rate its value will not even remain 50%.
So there are a few things that we need to follow when it comes to investment and I believe these are the basics for investment-
- We must save money try money and invest a part of it on regular basis.
- first save the money then manage the expenses in the remaining amount because if we think that after expenses whatever is left will be considered as saving and that is a further investment then this is not the right approach. Think another way around and this way will also help you to ensure that you are saving every month.
- No matter how much you are earning in a month but your expenses will never be enough to ensure that he was saving so to overcome this situation we must save first and I spend later.
- Never invest all the money in one instrument instead keep it diversified because you never know what will happen in the future and this way we can minimize the risk of the investment. There is a saying that- ''never put all your eggs in one basket'' and the same is applied to portfolio diversification.
- if something is offering extraordinary returns on the investment then try to stay away because it can also bring the same amount of risk.
- A decent amount of interest between 10-20% with discipline can also bring nice interest.
- Always follow compounding wherever possible because this is a powerful method of investing.
Money saved is money earned and similarly, if this is not invested then it's losing its value with each year maybe you can see the same numbers but in the market, things will not be the same. Inflation is a giant that keeps on reducing the value every year and investment is the only solution to overcome this problem even though we can keep on appreciating the value of the money.
Thank you so much
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saving money is important so long as it doesn't interfere with the daily life
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