Want to beat the inflation and secure your future by stock market investment? If you are yet to start investing, then do it from today onward.
You may be wondering why should one invest and how it helps us to secure our future. The reason for you to invest is that it helps you to beat the increase in the cost of living which referred as inflation.
It also helps you to create wealth so that you can able to fulfill your life’s financial desire like buying car, house, and holidays.
What if you don’t want stock market investment and ignore the monster ‘inflation’.
Suppose you are earning around Rs. 30K per month and your monthly expenses are 80% of your income. Your monthly expenses might include food, transportation, medical bills, shopping, child education, and other expenses. So, at the end of the month, you have Rs. 20% of your income that you have saved for your future or at the time of emergency.
Let us assume your monthly income is rising steadily by 10% and inflation is also rising by 8% year on year. Furthermore, assume you are 30 years old and plan to retire at 60 and just chill out after retirements. That means you only have 30 years in hand to earn.
For the time being, assume your monthly expenses are intact for the next 30 years and so here is the cash flow will be.
So, from the above cash flow, you will have only Rs.1,18,43,570/- in hand when you are at 60. Moreover, you have managed to save only 1.18 crore as your expenses are fixed. Imagine what will happen, if your expense are not fixed and undue and unexpected expenses occurs.
Just to save only 1.18 crore, you might have sacrificed your dreams too. What will happen post-retirement as there will be no income but expenses are intact? Whatever you have saved in the last 30 years, might help you to survive for the next few years only. I know this will be a very scary situation for you with no savings left.
Your enemy is the inflation and to survive in the future you need to fight out against inflation from today itself. So, before you run out of all your hard earned money, don’t just save. All you need is the stock market investment that grows at least by 12-15% per annum.
Consider investment instead of savings and keeping the cash idle. Suppose you start stock market investment at the age of 30 that grows at 12% yearly.
|Age||Income||Expense||Cash Surplus||12% Yearly For 30 Years|
So, after 30 years of stock market investment you will get around 31 crores instead of 1.18 crore of your savings. That’s the power of investment and compound interest that help you to make staggering more than 31 times of your savings.
Finally, how many of you are convinced regarding above results that may lead you to live your life like king size after retirement. That’s how you must be planned for your retirement.
Which investment option is better one?
Now that you have finally decided to invest instead of savings so, you have some options for investment in a different asset class. You can invest in fixed deposit, bonds, equity, gold, real estate, or other deposit schemes.
I suggest you go for stock market investment and buy shares of fundamentally strong and listed companies. Trust me you can make money insanely while investing in equities for a longer period of time. Although, returns are very high irrespective of high risk in stock market investment.
Unlike other asset class, stock market investment has generated over 12% return over the past 15 to 20 years. However, you may also need to aware of Long-Term Capital Gain Tax that may impact your profits. If you hold your shares for more than a year and gain above Rs. 1 Lakh then LTCG is 10% on your returns in India.
All you need is a Demat cum Trading Account that you can open online with Zerodha and start investing.
Key things to know before you start trading and investments
- Market Participants, Intermediaries, and Regulators – Three Pillars of Stock Markets.
- How Stock Markets Moves Lets You make money?
- Common Stock Market Jargons and Terminologies – Speak Like a Pro
- Trading Terminals and Software That’ll Make Your Life Easy
- What Happens When You Trade? Dive Into Clearing and Settlement Process
- Key Events That Impact Your Stock Markets Trading & Investment Strategies
Once you know the above key takeaways, you will get an overview of markets. After knowing the basic operation of stock markets, you can move on and calibrate your trades with technical analysis.
So, how many of you decided to dive into stock market investment? You can express your views and suggestion in the comments below.
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Published on: May 8, 2018