Top reasons why one should invest money are:
1. Wealth Creation – Investing your money will allow it to grow. Most investment vehicles, such as stocks, certificates of deposit, or bonds, offer returns on your money over the long term. This return allows your money to compound, earning money on the money already earned and creating wealth over time.
2. Beat Inflation – 100 rupees today would only be 96.5 rupees next year according to recent Indian inflation statistics, which implies that you would lose 4.5% of our money every year if kept as cash. Returns from the investment help maintain the purchasing power at a constant level. If you don’t beat the inflation rate you’d be losing money, not making money.
3. Retirement corpus creation – A person should invest while he is earning so as to create a corpus of funds that can be used when one retires. This retirement fund accumulates over time and provides security to maintain a comfortable lifestyle even after retirement.
4. Accomplish financial goals – Investing can help you reach bigger financial goals. This return on your investments can be used toward major financial goals, such as buying a home, buying a car, starting your own business, or putting your children through a college education.
5. Tax-saving – Some investment vehicles give a double return by providing returns as well as reducing your taxable income, which in turn minimizes the tax liability such as equity-linked savings scheme (ELSS) funds. Money saved is money earned which can be invested further.
6. High-returns – Investing would help to achieve high returns as compared to a bank’s saving account which provides a mere 4 percent return. Investing in markets could provide you returns upwards of 20 percent if given the right time horizon.