Here's What Differentiate 'Investment' From 'Saving' And Why Investment Is Necessary

New Delhi: Many of us after an age, feel that the money which we have presently is not sufficient for us and will need more such amounts for future uninvited expenses. Now, this is one of the main reasons which drives one towards the investment route.

It's not about you and me, often people who for the first march on this path of investment are very scared which exist until and unless one's masters the art of investment on any platform. As soon as one become a master in investing for them the process of investment starts looking even better.

Interestingly, the truth is that if you have grown up enough to make money, then, in that case, you start investing your money. Investing is nothing but a process by which you can use your money to make more money. Isn't it sounds good?

Definition of Investment

Investment is a process in which an attempt is made to increase the value of money i.e., after some time you get more money than the money invested. In other words, investment that tool through which you can use your existing money to earn more money.

Profits From Investment

For example, you buy gold or property whose value increases over time. After a few years, when you need money, you sell these things at a higher price because by then their value has already increased.

How One Is Being Benefitted From Investment?

You invest so that someone else can use your money and in return, you can also earn money. So, whenever you need your money, you get it with "interest". One can invest it through shares, which is has become common habits. Here you buy shares of a public limited company and become its shareholder. The company gives you a percentage of its total profit as a "dividend". This is how you get "income" from the money you invest.

Investment V/S Betting

Some people often think that investment and betting are related to each other. Considering such things is illogical. There are some risks associated with investing. However, investing doesn't mean betting - you can't invest money anywhere without thinking. Investing in the right way and is a well-planned process so that you don't have to depend on luck to get the returns.

Why Should You Invest And Why It Is Necessary?

The above mention points tell us that why investing is necessary. If instead of investing you keep your money in a piggy bank or safety wallet, it never grows. To grow your money, you have to invest it, so that you can get interest on it or sell or buy things whose value has increased over time.

Well, a lot has been spoken about the investment and let's dive into details of 'Savings' and understand it definition as well as how saving is different from investment. But before diving into the details, let us inform you that savings aren't an investment.

Unlike saving, when you invest your money, you do not just keep it safe but try to increase it. Keeping money in a bank account can't be consider as an investment.

What is Saving?

The difference between your monthly income and expenses is called savings. Add all your expenses like food, luxury, school fees, med fees, driver, rent, bills, maintenance and everything. What's left is your savings.

Also read: Portfolio Diversification And Its Benefits

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