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Why Investing Matters: Securing Tomorrow Today

Rahul sharma

Fund manager

Yesterday

Overview

Investing is a fundamental aspect of financial planning that allows you to grow your wealth and secure your future. Discover the essential reasons for investing, explore various asset classes, and learn why investing is beneficial at any age. By making the right investment choices, you can protect and grow your wealth, ensuring a stable financial future despite economic fluctuations.

To many, the word "investing" can seem overwhelming, a complex task reserved for financial gurus. But for those who have discovered its potential, investing becomes a captivating pursuit. As Warren Buffet famously said, "If you don't find a way to make money while you sleep, you will work until you die."

Although investing might appear to involve numerous complexities, it really boils down to two essentials: patience and a strong will to succeed. Are you curious to explore the world of investing and know how it can transform your financial future? Read on.

Why Invest?

A recent report revealed since FY15, India has experienced a remarkable increase in the number of stock market investors. According to the latest data from the National Stock Exchange (NSE), the country boasted 87 million investors as of January 31, 2024, compared to just 17.9 million at the end of March 2015. This represents an astounding growth of nearly 389 percent. This growth is proof of investment benefits.

If you’re wondering why invest, here are some reasons:

1. Wealth Accumulation

Investing allows your money to grow over time. You can build substantial wealth by investing in growing assets.

2. Financial Goals

Whether buying a home, funding your child's education, or planning retirement, investing helps you achieve these goals.

3. Beating Inflation

Simply saving money in a bank account may not be sufficient to combat inflation. Investing can provide returns that outpace inflation.

4. Passive Income

Investments can generate passive income through dividends, interest, and capital gains, providing additional sources of revenue.

Inflation Issues

Inflation erodes money's purchasing power over time. For example, if inflation is 3% per year, something that costs Rs. 100 today will cost Rs. 103 next year. If your money is growing at a lower rate than inflation, you are effectively losing money. This is why investing is vital. As per a recent report, assets like real estate are widely considered to be a historically proven hedge against inflation. Other asset classes like stocks, physical gold, gold ETFs commodities, and floating-rate bonds are also good investments against inflation.

Here are some asset classes you should know:

Different Asset Classes

Here is a variety of asset classes to choose from, each with its own risk and return profile:

Stocks

Stocks represent ownership in a company. They have high potential

returns but also come with higher risk.

Bonds

Bonds are debt instruments issued by corporations or governments. When you buy a bond, you're lending the companies or government money, and in return, they promise to pay you back with interest after a certain period. These provide regular interest income and are generally considered less risky than stocks.

Real Estate

Property investments can provide rental income and capital appreciation. Real estate often acts as a hedge against inflation.

Commodities:

Investing in physical goods like gold, silver, or oil can protect against inflation and provide diversification.

Mutual Funds/ETFs

These are collections of stocks, bonds, or other assets managed by professionals. They offer diversification and are a good option for beginners.

Why to Start Investing Today?

In truth, there's no age limit when it comes to investing. If you're in your 50s and think it's too late to start, think again. If you're in your early 20s, just starting your career, and believe it's too early, you're mistaken. Investing is about making the most of your time and placing your money in the right opportunities. No matter your age, now is the perfect time to invest wisely and secure your financial future.

However, there are three crucial factors to consider when investing: age, income, and risk profile. Each plays a vital role in shaping your investment strategy and ensuring it aligns with your financial goals.

Final Words

Investing helps you secure your financial future and achieve long-term goals. Ensure you carefully allocate resources across diverse assets and markets so that individuals can mitigate risks and capitalize on opportunities for wealth accumulation. Take control of your financial future with Jio Financial Services. Explore our expert solutions and start investing today for a secure and prosperous tomorrow! Visit us now to get started.

Disclaimer: Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Jio Financial Services does not guarantee any specific returns and all investments are subject to individual risk tolerance and financial situation. Please consult with a financial advisor before making any investment decisions.