Why Investing is Important for Every Individual? - Ajmera x-change

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Why Investing is Important for Every Individual?
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• You work hard day and night to earn your money.
  This makes it absolutely necessary to make your
  money work hard for you.
• The importance of investment decision
• Making an investment is how to take charge of
  your financial condition. It allows you to create
  a steady income stream before retirement while
  also creating real-time wealth. Thus, ensuring
  present and long-term future wealth. Not taking
  proper charge of your money or investing late can
  cause you to work longer without giving you
  financial stability for the future.
• The first investment is always the most
  difficult. Any online investment advisor will
  tell you that it gets easier after the first
  investment, due to compounding. You can choose a
  stock advisory company in Mumbai, if you live in
  the city, to guide you through the investment
  process.
• The best investment options for a single income
  stream are bonds, stocks, ETFs, and real estate.

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What is investing?

• Investing is not a one size fits all game. It
  can mean different things to different
  individuals. For some people, it can mean
  securing future benefits such as their health or
  skills, while for others it may be a means for
  generating income from profits. It generally
  means putting funds or capital into a multitude
  of assets in the hope that you will gain some
  kind of profit or returns from them in the
  future.

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Why it is important to invest

• Higher returns of investment
• Once youve come to know the importance of
  investment decisions, youll understand the
  variety of investment options available.
  Investing funds within an asset include a
  trade-off as the investor goes through the
  maturity period in the present to gain something
  of greater value in the coming future. For
  example -
• Stock investment can give you returns in two ways
  - One is capital gains, and the other is in the
  form of dividends.
• Real estate investment can give you steady income
  in the form of capital gains and rent.
• Investing in bonds can give you regular returns
  in the form of coupons and payouts that are given
  during pre told time periods.

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• 2. Retirement Plans or FIRE
• Most of the people who invest money do it to live
  a comfortable life after retirement. As a huge
  portion of people solely relies on salaries, it
  becomes a challenge to sustain their lifestyle
  when it is time for retirement. This means
  everyone has to understand the importance of
  investment decisions within their lifetime. Many
  millennials have made it their goal to FIRE
  (Financial Independence, Retire Early). Saving a
  major part of your income, around 70, can lead
  you to retire early while living a comfortable
  life.
• 3. Tax Efficiency
• Investing can help you cut down on taxes with
  accounts such as the TFSA, RRSP, Roth IRA, 401K,
  and others where the taxes on making investments
  are next to non-existent. As the government has
  reduced their responsibilities towards retired
  individuals, they have created such accounts so
  that retired citizens can fund and monitor their
  own retirement plans.

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• 4. Beat inflation
• If you simply keep your money or salary in your
  bank account, it can slowly start to lose value
  as inflation increases and eats away at your
  purchasing power. While the inflation rate
  reported is quite low currently, education
  expenses and health expenses are skyrocketing at
  a really fast rate. Your bank could even provide
  you with 0 returns or even negative returns
  someday in the future when the inflation rate is
  taken into consideration. To ensure you dont
  become a helpless person in such cases, it makes
  sense to invest in a multitude of assets that
  will help you beat inflation.
• 5. Achieve your financial goals
• Investing money is one of the easiest ways to
  achieve your financial goals. As you age, your
  financial needs develop as well, giving you
  different financial requirements in life. For an
  individual, it usually begins with the purchase
  of a house. Even if you fund your decision
  through a home loan, you need to pay up a
  substantial amount of down payment. By investing
  in a mixture of assets, you can build up the
  finance to pay up that down payment.

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Conclusion

• Making any investment is better than making no
  investments. Remember to choose carefully from
  the options available to you. Usually, the higher
  the returns of an investment, the more the risks
  are of losing it. Ensure that you invest in a
  variety of assets instead of a single stream.

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