3. What is Saving?
Saving is when your income is more than your expenditure.
Income includes salary, interest from your bank or property rent etc..
We generally do savings to fulfill a dream, for eg, buying a property,
automobile, etc.
Savings starts at very young age when a child does not get his
favorite toy and there savings come in action. They start saving the
pocket money to buy the gadget or toy
Savings insures financial stability for future.
4. What is an investment?
Investment means spending your savings to earn profit.
Savings only means to save a particular amount without any
profit, however investment consists of putting savings in
various areas such as fixed deposit, mutual funds, gold, etc
which generates a rate of interest return on your invested
money.
The challenge in investing is proper financial planning to get
maximum profit
5. Inflation means a substantial increase in the price
level of goods and services in an economy over a
period of time.
Yours savings of today may not meet your future
demands because of inflation. If a property is worth
30 lacs today and you start saving to buy it in next 5
years, mere savings will not help because inflation
will rise the property rate and your savings will not
be sufficient to own your dream home
On the other hand, investment which has risk
attached with it can give valuable returns if the
investment is managed properly
Inflation
6. Both savings and investment play
important role in financial planning
To meet short term goals, for eg, buying a gadget savings can
be useful but when financial responsibility comes in action
investment is the wise man’s choice.
Financial responsibility increases over a period of time say,
marriage, kids, kid’s education, child’s marriage, old age
finance independence.
7. So, to meet your financial responsibility start small
investment from today.
If you have a saving of Rs. 3000 a month, start
investing in low risk mutual funds.
Mutual funds are subject to market risk but gives a
good ROI if the investment is managed wisely
8. Contact Us
If you want more knowledge on mutual fund read Reliance
Mutual Funds Investor Education articles.
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