What are the Fundamentals of Investment?
What is savings?
Saving is conserving money in reference to future use. There are many ways in which one can save like putting money in a bank or taking up pension plans or reducing expenditure which are totally unnecessary. Savings does mean low risk preservation of money when compared to investment, where risk is much higher.
What is investment?
the money you earn is partially spent and therefore the rest is saved for meeting future expenses. rather than keeping the savings idle you will wish to use savings so as to urge come back thereon in future. this is often referred to as investment.
Why should one invest?
One invests to:
Earn High returns
Make provision for uncertain events occurring in future
Generate amount of money for predetermined goals.
When should one start investing?
The sooner it is the better it becomes. When invested earlier there’s more time wherein one increases income based on interest or dividend earned on principal amount and have a lot of time to grow thereon year after year.
We can say there are three golden rules for all who wish to invests:
Long-term investment instead of short-term ones