Investment has no secret formula. The rule of investment is have the right information, plan your savings and investment, and make investment on assets. The steps involved in the process of investment is as listed below:
* Budget to Save
* Save and make investment regularly
* Investment shall be for long term
* Control your debts
Why at all we should do investment?
Ask your father and he will tell you the wisest thing he did when he started his career was to open a recurring deposit account in the bank at the start of his career. In those time investment were limited or else people were less informed about investment options and about necessity of investment. Now the days have changed, not only people has become more aware about investment but also the demon of inflation making us think more aggressively about wise investment.
* Inflation is eating away your savings
* Maintain a good standard of living
Inflation eats away your money even when you are sitting and watching your favorite movie. If your have a monthly expenses as on today as 15,000 and annual inflation is 5%, 20 years later those same goods will cost you a whopping 40,000. It means for the same set of items today you are spending 15,000 and after 20 years you will have to spend 40,000. Bank deposit gives you a meager return of 6-7% per annum. After considering the effect of inflation and tax you are left with returns which is practically negative. Means investment in bank deposit is making you loose money rather than making it grow. This is not a wise investment.
Source: http://ezinearticles.com/?Investment-Guide&id=3111509
We have to take into consideration upon investment the inflation rate that may cause us to lose money in the end. And the first step to investment is save. Save! Save! Save!
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