Why invest?

“Risk comes from not knowing what you're doing” ― Warren Buffett

INVESTING

Lillaney

4/18/20231 min read

What will happen if we do not invest? The value of money goes down as time passes. What does that mean? It means that the goods and services that you can buy with say Rs.1000 today will be able to buy less next year. Why is that? This is because prices of goods and services are increasing over the long term in most cases. This rise in prices is called inflation. So the first reason to invest is to stay ahead of inflation so that we can afford the things we need and desire not only today but in the future as well.

One more reason to invest is taxes. The income that we receive is taxed, so we cannot spend or invest that money. There are some taxes that can be reduced by making investments according to the rules of the time. So we should take advantage of these rules so that the money that we receive in hand is increased.

The above 2 reasons : Inflation and Taxes are the most common reasons for investments.

Once we understand the rationale of why to invest, the next question that comes to mind is “Where to Invest?


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