WHY INVESTMENT?
Investment, Investment, Investment…a very common word or topic that we often come across, a simple word, a rather simple concept, but we make it complicated. Why? Because of the fraud and scams that we get to hear every now and then, Isn’t it? So today we are going to talk about why investment is important and why it is rather necessary for the students, the youngsters, that they should be well versed with this concept. If we wanted then we could only have concentrated on the concept and processes of Investment, but I believe the whole market is filled with the details of the process. So when you are thinking of investing for the next 40–50 years, then don’t you think, 1 or 2 sessions should be solely dedicated to getting the concept clearly? Now getting your concept clear is very important, because this is the only reason, some of them fear investing, because when your concept is not clear, one can easily fraud you.
Okay, so without wasting much time, let’s get started!
So what do you think the investment is? Is depositing money in a bank, called Investment? NO. The banks provide us with the interest rate of 3–4% well that is considered safe, there are fewer chances of fraud. Say, if someone has deposited in SBI, there are chances of risk, but the risk will certainly be less because the Government and the RBI will not let SBI be bankrupt. So you can make out, depositing money in the bank is safe, but it’s just that we will not be benefited with this, the rate of interest that the banks provide us, will not make it up, because with the span of time, the value of our money decreases, which happens due to inflation. Now, what is the time value of money, say you require Rs.100 to purchase a product today, and in future, you would require an amount of Rs. 150–170 to purchase the same product because the value of money decreases with time. And the inflation rate, the rate with which the value of money decreases, is comparatively higher than the interest rate that the banks provide us. Now you realise this is not a good option, and then we start to think about other options of investment, why not real estate? Why not the stock market? Or Mutual Funds, many of them say that Mutual funds are safe. So let me clear one thing that, every investment definitely carries some risks along. You cannot invest in the market, seeking profits from the safer side.
Vyolvepaisa will let you go through each and every topic, but from the basics, because the market is filled with people who are readily available to help you in trading and they have various investing ideas, but you should know the basics because it’s your money, no one can manage it better than you and you should know how to save your money from the fraudsters. It is risky to trust someone for your money. But when you understand the concept, this will not be risky, because you know how you are managing your money, you are prepared about the risk as well as for the consequences.
And if you really want to know the real benefit of Investment, then you should look up to the COVID-19 scenario. COVID has taught us a lot, the virus disrupted our whole economy, many of them lost their jobs, many continued to be jobless, but the people who invested properly, actually got the benefits of their investment. We all know that crores of people lost their money in the share market due to COVID-19, but on the other hand, Radhakishan Damani, the Chairman of D-Mart earned worth crores, and this is so simple to understand that, in the COVID-19 scenario, when many of them are losing their money, then on the other side, there is also someone, who is earning that money, and it is only based on how better you are investing. And these are the fine reasons why people get afraid of Finance, we often think it to be a complicated one, that we don’t even feel like giving it a try to learn and understand Finance. We often feel that, what’s the point, I don’t have much time to really indulge in it. We have a lot of time for time-pass but we don’t have time for productive work.
Actually the problem is in our education system, we are taught from the very beginning that we have to study hard for earning money, but they never teach us how to save and utilise that earned money. We work with all our blood and sweat to earn money, isn’t it? So don’t you think the criteria for making the best possible investment of that money should be our priority?
And remember that the market is filled with the Brokers and Agents providing you with the best investment and also claiming to provide you 100% profit on your investment, and yes, there is a possibility of getting 100% profit, but definitely, NOT YOURS. The Brokers and agents are not sitting there to provide you with the 100% returns. Remember no one can take care of your money than yourself, you worked your entire life, so hard for earning it, right? Then why not just a small and important step for your money?
And believe me, this is not Rocket Science, you need not know all the things, it’s just that Finance is for everyone, not only for the commerce students and for the Technical students, you will find Algorithms here, Artificial Intelligence is also used here, you can also make the best possible use of the financial education even if you are from the Technical field. By just making a chatbot in technical or by just making some new cool stuff, we become happy, isn’t it? But do you really put emphasis on understanding what we are actually doing? And it is not much complicated, Finance is simple, Stock Market is simple, when you are investing with your own understanding, you will definitely earn, but when you are listening to others while investing your money, you will lose. SIMPLE.
And, why this is necessary for the students to know because they are in their starting phase, they are fresher’s, and they are most likely the easier to be caught in fraud, because they have little idea about investing, and they easily believe when people show them the brighter side.
Well, the earlier you start investing, the more beneficial it will be, for your future, we all know about the compounding effect, right?
“Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it ~ Albert Einstein”
In Vyolve Paisa we will surely discuss this as well in the coming sessions. So before you invest, think about YOUR INVESTMENT, and do not rush into an investment, just by listening to the advice of your friends or buddies. The person might be your best buddy but cannot take care of your money, more than yourself. And yes, many of them tell that Mutual Funds are safe, tell them nothing, just ask them to search about the Franklin Templeton Mutual Funds, in the COVID-19 scenario, you would get to know all about how safe mutual funds are.
And this is just a small concept, in our entire life, we keep studying History, Geography, and whatnot, which will be used nowhere in our life, but when it comes to Finance, people be like, “I don’t have much time”… “this is so hard to learn, I will find another way”. Guys, there is nothing bad in understanding Finance, when you know this will be beneficial for you throughout your lifetime. With the proper understanding, you will have a clear idea of who is actually helping you, and who is just seeking for their benefits by trying to fraud you, because after all, it’s your money. And it totally depends on you if you have to value your money by understanding the concept or your investment will be based upon the tactics of others. Think about it! Take out a little of your time for your money.
In the coming episodes of Vyolvepaisa, we are going to discuss about all the Financial topics from basics, and why basics and why not directly the concept? Because this is the first step to the ladder, YOU SHOULD KNOW, you have a long way to go, you are investing for the coming 50–60 years. So don’t rush into anything, we have plenty of time because, in Vyolve paisa, we would learn everything from the basics calmly and together we will EVOLVE WITH VYOLVE.
We will be back with another episode of Vyolve Paisa, so by the time, keep following Vyolvepaisa for the Financial updates, and do not miss any of the episodes.
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