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Wednesday, December 23, 2009

Why need I invest?

The basic question “Why need I invest?” merits attention before we move on to the bigger question of why one should invest in shares. Simply put, you want to invest in
order to create wealth. While investing is relatively painless, its rewards are plentiful. To understand why you need to invest, you need to realise that you lose when you just save and do not invest. That is because the value of the rupee decreases every year due to inflation. For example, if you ran a household within a budget of Rs100,000 in 2000, to run the same household today (assuming the
same set of expenses) you would probably need Rs125,000--that's Rs25,000 added to your budget because of inflation! Thus you need to generate an additional Rs25,000 and that can be possible only by INVESTING your hard-earned money.

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