A primary misconception which a lot of people have is that investing is for the rich.  From a traditional viewpoint investment is considered as a risk for an average house hold Indian family. People feel more comfortable when putting their savings in FDs or Banks where they stand at an equal amount of risk when things go south like the recent scams from YES Bank and PNB to state a few. One should understand that putting your savings in instruments which provide less returns than current inflation rate will eat up your hard earned money. If you don't invest, you will miss out on opportunities to increase your financial worth. 
Needless to say, you have the potential to lose money in investments, but if you invest wisely, the potential to gain is higher. 



Below are some reasons as to why you should invest your money now:

  • Wealth Creation - Investing your money will allows it to grow. Most investment instruments, like stocks, certificates of deposit, or bonds, offer returns on your money over long term. This return allows your money to compound, earning money on the money already earned and creating wealth over time.
  • Beat Inflation - 100 rupees today would be 96.5 rupees next year according to recent Indian inflation statistics, which means that you would lose 4.5% of our money every year if kept as cash. Returns from investments helps in maintaining the purchasing power at a constant level. If you don't beat the inflation rate you'd be losing money, not making money.
  • Retirement corpus creation - A person should invest while he is earning so as to create a corpus of funds that can be used when one retires. This retirement fund accumulates overtime and provides security to maintain a comfortable life-style even after retirement.
  • Accomplish financial goals - Investing can help you reach bigger financial goals. This return on your investments can be used toward major financial goals, such as buying a home, buying a car, starting your own business, or putting your children through college.
  • Tax-saving - Some investment instruments give a double returns by providing returns as well as reducing your taxable income, which in turn minimizes the tax liability such as equity linked savings scheme (ELSS) funds. Money saved is money earned which can be invested further.
  • High-returns - Equity investments would help to achieve high returns as compared to bank's saving account which provides a mere 4 per cent return. Investing in markets could provide you returns upwards of 20 percent if given the right time horizon.

FACT: If a person invested Rs. 10,000 in June 2011 then that amount would have compounded to around Rs. 1,00,000 today!



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