Going Old school might be a better alternative in all other aspects but have you ever witnessed someone become rich because of preferring the primitive methods of investment ? The answer probably is a NO.
No matter whichever business is concerned, if you’re no longer willing to adjust with the current business environment your business may fail to survive in the long run. The Same goes with investing. Thus, interacting with the business environment and implementing suitable strategies for survival in the long run is a MUST in today’s era .
So let’s just get straightaway into the topic and gain maximum from this piece of article .
Most of the Indian households consider the primitive ‘FD’ (Fixed Deposit) as a safer investment than many other existing investments because it ensures a fixed return, say 6-7% to the investor. While if we consider the Stock market, the expected returns are very uncertain so the chances of risk increase. While investing in the stock market may require great knowledge and expertise, But then just imagine that 6-7 % a year is sufficient enough? Will it make you retire rich in the coming years? NO, it never can .
On the contrary some analysts believe that Investing in FD is a yet riskier investment than many other investments. How? Just compare it with the inflation and taxation system prevalent in India.
Let’s consider that you invested ₹ 100 in FD and parallelly you saw something you want to buy that will cost you ₹100 at the present time. After a year, due to increasing demand it is expected to see a 10 % inflation on that product.Now ,will a 7 % return on ₹ 100 i.e ₹ 107 able to finance 10% inflation i.e ₹ 110? NO.
Now on the other hand, we know that interest income received from FD is fully taxable. So how can you expect to be rich with FD? It can stabilise your earning to some extent ( based on the amount of investment ) but It can never give you the lavish life you dreamt of.
So from the above comparisons it’s quite clear that before analysing any investment decision and finalising which one to choose, many factors should be considered. Inflation and taxation are two such factors.
There are many other investments that can yield such returns which are worth living a life you always dreamt of. It’s quite obvious many of us dream big. But there’s a line that divides between being successful and dreaming to be successful. That line is earning and investing your earnings so carefully that it gathers you some great returns. So the knowledge of modern investments like stock market, real estate should be taught in schools so that students learn this at an early age and make investing a part of their life by the time they graduate. Many rich personalities like Warren Buffett , Rakesh Jhunjhunwala have made millions through stock market investment. Such is the importance of investing, well enough to be included in the normal curriculum of schools.