Money is very essential for everyone’s life, it plays a vital role in your life and building wealth for the future. Some peoples have lots of money and some are still struggling for it. So, investment is important to build wealth. There are only two ways to make money –
(a) By providing work to ourselves or work for someone else,
(b) Building assets which provide money to you.
Everybody earns and saves some for his/her future. If savings are just kept in your pocket or under a mattress, instead of on investing, your money doesn’t work for you & money will never grow.
The things which rich peoples do is that they just invest their money and generating more money by earning interest, on what they put sideways on buying assets that generate money for them.
This is the simplest way which only 1% of the world’s people follow and occupies 99% of world wealth.
“The poor and the middle class work for money. The rich have money work for them”.
It doesn’t matter whether you invest in Stocks, ULIP (Gold or Silver), or Real-Estate; contributing to occupying assets, the objective is the same to make investments to generate extra income. [Also read: How to Build Best Income generating Assets?]
Today’s time, if you invest your money, it will help you like the following figure:
Always keep in mind that savings and investments are totally unlike each other. Savings only help you to able to invest. If you putting your savings into a bank account or fixed deposits that doesn’t solve your future targets. Every middle-class person has some needs or targets that they want to achieve. But due to lack of financial knowledge and management, they just work for money, and even they put their savings into a bank account or fixed deposits, it will not help them to reach their financial targets.
They are those peoples who always keep themselves in frustration and poverty.
But if you think little differently and invest your money in the form of purchasing shares in the stock market, putting money in mutual funds or SIP you can make money work for you and you will help yourself to become wealthier. (Read Mutual Fund Vs Stock Market)
Investments are always for long term goals like retirement, college education, or buying a house, also beating the inflation rate.
But savings are just only for the short term needs to complete, and merely equalizing you with the inflation rate.
Our target must be to beat the inflation rate only after we can be financially independent. [See more Difference b/w Saving and Investing]
INVESTMENT HELPS IN COUNTRY ECONOMIC GROWTH
Investment also helps in-country economic growth which most of the peoples don’t know. Investment in business helps economic development. If business owners have adequate investment they will produce more goods & they can make available more employment opportunities to the country. Also, if employment opportunity increases in a country, income & standard of living of employees will also increase. Now, the standard of living increases, without human intervention the utilizing power also increases. The country people will consume more goods from business & business peoples get an advantage. Concurrently, the economic environment of that country also expands.
So, keenness of life investments always helps you to increase standards of a person’s life as well as country economic growth in different ways.
What Investments can do is what savings cannot do, which we should understand. It is our choice where we want to take our life, “should we work for the money or should money work for us”. [Read How Money Works (Part-1)]
I still have so much to say to you about the importance of investment and I want to help you get more knowledgeable. But in the end, I will only say that we are growing to become poor because of our education system as well as our relative environment. No education system provides us with financial knowledge or the importance of our money. We should understand the importance of investment which really-really helps us to become financially independent because it’s our money and we don’t want to lose. [Check Are you Financially Educated?]
If you have any questions please let me know in the comment section. I will try my best to provide you the answers up to my knowledge.