Proper Method of investing

In Indian families, the first lesson of Indian economic understanding often begins with savings - 'Earn, spend less and save.' This habit is good, but is it sufficient to meet future needs?

If you invest Rs 5,000 every month and get 12% annual return, then in 20 years you can get more than Rs 50 lakh.

Why is it important to invest in the right place along with saving?

The money kept in your bank account grows at a fixed interest rate, while inflation reduces its purchasing power every year. Whatever you can buy with Rs 100 today, the same Rs 100 can buy only half the amount after five years. That is why in today's era it is important that you do not just save money, but invest it in the right place, so that it works for you in the future.

Old thinking vs. new thinking

Earlier it was said - 'Save money, do not take risk. Today it is said 'put money to work, invest wisely.' The old thinking only provided security, but the new thinking leads to prosperity and self-reliance. In today's era, investing in diverse instruments, doing tax planning and taking advantage of compounding has become necessary. Smart investment is the need of the hour.

Things You Will Need

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Method

Benefits of investment

• Beating inflation
• Getting regular returns
• Building a fund for retirement
• Achieving big goals like children's education or buying a house
• Investment does not mean risk, it means preparing for the future wisely. The sooner you start, the more you will benefit.

Compound interest - How does money make money?

Let's understand this in a very simple way. Imagine you invested 10,000 at 10% interest every year.

At the end of the first year, 10,000 + 1,000 Total 11,000

Second year

10% on 11,000 1,100 Total 12,100

Third year

10% on 12,100 1,210 Total 13,310

In the tenth year, it will increase to more than Rs 26,000.

This is compound interest. It does not increase your wealth slowly, but rapidly. If you invest Rs 10,000 every month and get 12% annual return, then in 20 years you can have more than one crore rupees. Therefore, it is important to maintain regular investment, only then you can get the full benefit of compounding.

Earning through investment

Earning can be increased through investment, such as: you can invest in stock market, mutual funds, SIP, fixed deposit, property, gold etc. Here your money will make money.

How to increase money?

To increase money, start investing early. Only then you get more benefit of compounding.

Note:- Choose investment options according to your risk capacity and goal. Consult an advisor about investment.