Why is investing important?

50 YEARS BACK.

Recall the scenario when your parents were working…In those times, it was common for people to stay in the same job all their working lives. Most of them had government jobs where job security was ensured. Opportunities were limited. So they were content with what they had.

With whatever financial assistance and savings they got, they managed to raise children, educate them and buy a home. Medical field wasn’t so technology driven and expensive.

When they retired, they got the benefit of pension that has dearness allowance built in so that, their pension pay grows with inflation. And, they expect their children to look after them in their old age.

NOW..

But now, times have changed. Most people work in the private sector where there is no guaranteed job security. But, every sector has an ocean of lucrative job opportunities to offer.  This generation lives in a very competitive world than ever before.

It’s a situation where they need to work really hard to make a mark.At the same time, they need to look after their aged parents, take care of their children’s needs, and fulfill their own dreams.

Medical expenses and retirement are real big issues.With advanced technology being used every where, the cost of hospitalisation and treatments are so high that , it’s almost beyond the reach of common man.

You need not expect your children to look after you just because, they are going to live in an even more competitive , stressful and faster world.

So it becomes quite essential for today’s generation to invest for their future needs. Mere savings from job may not be enough. You have to create wealth by investing. Simply put- while your work hard for more money, you money too should work for you!

Investing is not something which only wealthy people can do. Investing is possible for all classes of people. For this, irrespective of your income levels , you need a proper financial plan. You need not have big funds to start investing. even if you invest small amounts regularly, you will be able to achieve all your goals. The starting point is – you should decide where you will invest and how long.  To choose wisely, you need to know the investment options thoroughly and their relative risk exposures.

That’s the importance of investing. Investing is the best way to secure your future.

PLAN AND INVEST

The key to wealth is to plan and invest. Your job is only half done when you save money. That money has to be invested in wealth creating assets in prudent ways.  As a first step, you have to clearly define your short term and long term financial targets. Once you have a clear idea about your financial goals, the next step would be to draw a clear road map to reach your target. However, readers should not think that financial planning is all about creating wealth. Financial planning, in fact, is a very broad term and Investing is only a part of your financial plan. A proper financial planning can be done only if you can clearly chart out your strengths , your goals and your capacity to take risk.

Later on, we will discuss what financial planning is all about and the advantages of having a definite plan.Right now ,our next chapters would explain more helpful topics like when should you start investing and The right mind set for investing.

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1 Response to “Why is investing important?”

drjayaramtd

March 30, 2012 at 2:18 am

good tips for financial mangement for the beginners

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