Why you should save and invest money?

To beat inflation and maintain living standards as time passes not only is it important to save and invest but equally important to do so wisely.

With the passage of time the term 'Money' has become one of the most important necessities of everybody's life, without which thinking about anything is next to impossible.

Its importance can be compared to the blood in our body. Today with the increasing human wants, longer life spans, and huge number of opportunities available to spend, just earning good is not enough; it is equally important to invest your money wisely to ensure that it is generating a good return and securing your and your family's future.

Therefore the terms investment and investment planning are widely used these days.

Before proceeding any further, it is important to understand the meaning of the terms 'Savings', 'Inflation' and 'Investment' individually and their relation with each other.

The authors have written the book Investment Planning: Turn Your Money into Wealth. This book published by www.buzzpublishing.net covers the details of investment avenues like shares, mutual funds, bonds, bank deposits, pension schemes, real estate, commodities, tax saving schemes, etc whose knowledge is essential for everyone to make our money grow and secure our financial future. This book also covers details about insurance planning, retirement planning and children's future planning.

Savings

The amount left with an individual after meeting the cost of living from the amount that he or she earns in a given period of time is known as savings.  These savings are used to meet future needs and expenses.

Another important feature of savings is that these can be relatively accessed quickly. Generally people keep their savings in their bank savings account of any bank so that the money is available to them whenever required.

Now, instead of keeping these savings idle, it is advisable to use it for getting good returns on it for a better future ahead. In financial terms this activity is known as investing.

Inflation

Inflation is the rate at which the cost of living increases and the value of money decreases. In other words, money will not buy the same amount of goods or services in future as it does now or did in the past.

In layman's language, inflation can be explained as an increase in the value of goods and services over a certain period of time.

Investments

Investments help you meet your long term needs and large financial goals. There are certain levels of risk attached to all types of investments. The higher the risk, the greater is the chance of higher returns.

Why to invest?

Many youngsters often ask us why there is a need to invest, isn't saving just enough? This question can be answered by an example explained below.

When our parents were young, a movie ticket used to cost around Re 1. Today the value of the same ticket would be around Rs 100.

At that time people used to work for a salary ranging between Rs 250 to Rs 400 per month.

Today, we work for an amount of Rs 25,000 to Rs 40,000 or more per month for the similar job. This increase is because of inflation.

This means that, if the price of everything goes up, salaries also go up.

Now imagine if in those days, our parents had saved Re 1 thinking that they might use it when they would get older to watch a movie, then today with that Re 1 I am sure they cannot buy anything more than a candy.

The moral of the above story is that, the worth of Rs 1 has dramatically reduced over the years. Therefore to fight against the evil of inflation just saving our money is not enough, but also invest it proper planning so that it grows over the period of time.