1. What is investing?
If you keep your hard earned money in a safe at home, it will not increase, but will reduce in value. Investing lets your money earn some more money, thus getting it to work harder for you. In effect, your savings do not sit idle, but help you profit from them. Investing, unlike saving, has the potential to increase wealth faster and with professional guidance and sound planning, investing can help you lead a financially independent life.
2. Why should I invest?
There are two main reasons why you should invest and not just save:
To stay ahead of inflation - cost of living keeps increasing constantly and investing lets you keep pace with these changing market conditions.
To achieve financial goals - as the saying goes - a journey of a thousand miles begins with a single step. Investing small amounts of money over a period of time brings you closer to your financial goals.
3. What are the various investment instruments?
There are many investment instruments, namely Equities (or shares), Mutual Funds, Derivatives, National Savings Certificates, Bank Fixed Deposits and Commodities like gold, oil, etc. However, investing in shares is one of the best options for individual investors over a long-term.
4. Isn’t investing in shares a risky business? Shouldn’t I simply save?
Not if you rely on research reports and make informed investment decisions. Saving does not take care of the inflation rate; investing does.
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