Why You Should Invest For Future?

In India, only 3.7% of people invest in the stock market and about 3.5 crore people invest in mutual funds, out of the population of about 140 crore people. Although this number is growing, people still do not understand the need to invest, this may be due to assumptions about equities or schemes, incorrect knowledge, low risk-taking ability, etc.

There are two very simple things that investing does. Firstly, it helps you fight against inflation. If you invest in different assets, the value of these assets will grow with the cost of your living. For example, if you have Rs.100 today, the value of this money may be Rs.80 after 10 years due to inflation. But on the other hand, if you invest this money and over 10 years it may increase up to Rs.120, this will help you face inflation and afford a higher cost of living. When you do not invest, you struggle in the long term as you have no passive income coming in, and this can be scary. The second thing that investing does is, creates wealth. By investing in varied assets, you will have a better corpus in the long run when you decide to withdraw your gains. Investing can only promise you gains and positive returns for the long term. When you invest in a good mutual fund, your investment gets compounded each year, the power of compounding is truly amazing and can promise you terrific returns over a few years. 


Consider investing as a safety net, for your retirement, for your child's education, marriage, a new car, a new home, or any other goal that you want to achieve. Your active income maybe your salary or your profit but your passive income that you get from investing is as important in the future. If you're about to lose your job or your business is in a tough spot, these investments will always have your back. An important component of investing is also starting early. 

For example, if investor A starts investing Rs.50,000 at 10% CAGR at age 25 and stops investing at age 35, his total investment will be Rs.60,00,000 but he does not withdraw this money till age 60. On the other hand investor B starts investing Rs.50,000 at 10% CAGR at age 33 up to age 60, this total investment is Rs.1,62,00,000. Let us compare their corpus at age 60, Investor B's investment value is Rs.8,23,00,000 while Investor A, who invested for only 10 years but started early, his investment value is Rs.11,18,00,000. This is almost 3 crores more. This is the impact of starting early. 

Invest with discipline, that every month on the said date I will invest a said sum of money. There is a plethora of financial assets today, some highly volatile and some not. Such as fixed income assets like fixed deposits of government bonds, real estate, commodity/bullion, cryptocurrency, and most importantly equities and mutual funds. You can start as early as you want and you can invest as low as you want but do invest.


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