InvestmentJuly 22, 2022by admin0

10 Reasons Why Investment Is Important

Savings and investments are generally assumed to be the same. But, there is a distinct difference between them both.  Saving is the money put aside or left after one’s monthly expenses...

Savings and investments are generally assumed to be the same. But, there is a distinct difference between them both.  Saving is the money put aside or left after one’s monthly expenses. Whereas investing is making one’s money work for more money by pushing them into financial vehicles or services such as shares, bonds, property, stocks, and long-term deposits.

Investments generate additional income by increasing the value of your asset. Savings accumulate over a period of time, but investments may have risks. The risk factor may attain greater rewards in the future for you as it has more potential.

10 Reasons Why Investment is Important?


  •  Increase Your Capital Gain

Capital is the wealth you possess in the form of cash in the bank or liquid assets. The increase in the value of your capital when they are sold is a financial decision well made by choosing investment over general savings.

Investments can increase the value of your liquid assets with careful handling. It also increases your funds if you decide to sell your investment at a profit.

  • Achieving  Goals

Different people have a different set of goals, financial and otherwise.  You might have a goal to buy your dream house or a car or a piece of land, the goal you set will be the motivation to invest. Your goals could be short-term or long-term, and investing your money according to your goal will play a crucial role in achieving them. Investments are a roadmap to achieving your goals within a particular time frame. 

  • Income Diversification

It is more than essential for every individual in this day and age to have more than one source of income. With the ever-increasing prices and rapidly changing lifestyles, multiple sources of income have become a norm. Investing is the best option to diversify your income with less effort and time. For example, investing in shares will increase in value and also pay a timely dividend.

  • Early Retirement

Retirement is on everybody’s list, but the plan for it varies. If you want to enjoy the fruits of life and have a lifestyle that you currently live with a standard income, working after retirement or investing should be paid heed to. There are various investment vehicles like shares, Mutual Funds, and regular payable dividend sources. Investments will ensure a concrete source of income for your retirement journey.

  • Support Family & Others

You can use the investment to extend your help in raising your kid’s college funds, your partner’s new business idea, and other personal intentions. You can also leverage your investment in supporting new start-up ideas and other causes you feel morally obliged to.

  • Grow Wealth

Like everybody else, you would want to build your wealth. The savings that you accumulate over a period of time can be used as a source of investment that will reward you as dividends or interests. These can be utilised as capital to invest in various financial streams in pursuit of surplus gains.  

  • Financial Discipline

The market is volatile and uncertain. This comes as a part of the game for investing.  Regular investment and a steady stream of wise investments will yield the desired returns. Also, if you have a long-term investing plan, it will encourage you to make financial decisions that are not erratic. This will provide you with information on your expenses, financial patterns, and other superfluous expenses.

  • Minimise Tax Liability

If you are a taxpayer, there is no way that you have not thought about cutting down on tax payables. Everyone has to pay tax if they have a taxable income. But, you can optimise tax-paying amounts through specific investment schemes. There are retirement schemes and various Mutual  Funds schemes that avail tax-benefit. 

  • Beat Inflation

Opting for investments will increase the purchasing power against inflation. Purchasing power is the ability to buy products or services with a limited amount of money. The purchasing power is not static due to various factors, inflation being the major one. Inflation is unavoidable, and it affects your livelihood expenses. Investments in diverse streams will help you level the inflation or even beat the inflation rates.

  • Financial Security

Life is an uncertain event at large. You can never predict nor assume that everything goes by the plan. There can be many financial crises that may strike you when you least expect them.  Being prepared for a rainy day is always essential. Investments will allow you to be financially secured and prepared for an uncertain future.

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