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What is Investment & When to Get Started?

Are you one of those who is looking to get started in life and has recently started earning; then you must go through as the gist lies in the word Investment and one must understand that earlier you start investing the better it is for you in the life ahead.

Now crucial question is that what is investment and in layman language we can say that it is the
money you earn is partly spent and the rest saved for meeting future expenses. Instead of keeping the savings idle you may like to use savings in order to get return on it in the future. This is called Investment.

Why should one invest? 

Just remember that one needs to invest to:
  • Earn return on your idle resources.
  • Generate a specified sum of money for a specific goal in life 
  • Make a provision for an uncertain future 
  • Meet the cost of Inflation. 
Now inflation is a big monster as we call Inflation as the rate at which the cost of living increases. The cost of living is simply what it costs to buy the goods and services you need to live. Inflation causes money to lose value because it will not buy the same amount of a good or a service in the future as it does now or did in the past. For example, if there was a 6% inflation rate for the next 20 years, a Rs. 100 purchase today would cost Rs. 321 in 20 years. This is why it is important to consider inflation as a factor in any long-term investment strategy.

Remember to look at an investment's 'real' rate of return, which is the return after inflation. The aim of investments should be to provide a return above the inflation rate to ensure that the investment does not decrease in value. For example, if the annual inflation rate is 6%, then the investment will need to earn more than 6% to ensure it increases in value. If the after-tax return on your investment is less than the inflation rate, then your assets have actually decreased in value; that is, they won't buy as much today as they did last year.

Our Take on the Subject

Just remember that earlier you start the better it is as you are able to get the benefit of compounded interest and make sure that your investment generate returns more than the inflation which we have explained above. Ideally Indian equity market has beaten inflation hands down for past number of years and you can get exceptional returns by using daily stock tip which finishes by 11:30 AM in intraday market and can use short term tips if you desire to make time work to your favour.

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