What is Investment? And Where Should You Invest To Get Rich?
What is investment? Why do rich people in the world invest? Why is it important for us to invest? Where else is it best to invest? Friends, today we will know the answers to all these questions in this article. Many of us has confusion about how to invest? and where to invest? So, today you get proper information about investment in simple words. Then let's start the topic without delay.
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| What is investment in simple words |
🔖 Topics Of Content:
- Introduction
- What is investment in simple words?
- Why do rich people invest?
- Why should we invest?
- Where should we invest?
- Conclusion
What is investment in simple words?
Investment means putting your money in such a place so that we can get more money back than our invested money. And the amount of money we get back on the money invested by friends, we call it the return of investment. For example, if we invest 100000 rupees in the stock of a company and the value of our invested investment in the future increases to 140000 then we will say here that on 100000 investments we got 40000 returns or if we say in percentage then we get got a return of 40%.
We mainly benefit from investing in only four ways:
- Capital Appreciation
- Interest
- Dividend
- Rent (real estate)
So we get the return on investment only by these four methods, keep in mind that there are many other types of investments in the market, but all of them are based only on these four investments.
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Why do rich people invest?
Friends Finance expert Robert Kiyosaki has said that the most important thing that separates all the rich people from the poor people is that the rich people do not work only for money but they make money work for themselves. Yes, friends, this small thing separates rich people from common people, and the only way to make money for yourself is to invest it in a good place.
Rich people know that they can work only for 12 hours in a day so that they can earn money, but if they save the money earned in 12 hours and invest it in a good place, then along with them the money invested. You can earn for them, and then the return that will come from that invested money can also make more money by investing them. Friends, for this reason, all the rich people invest a little money and make a lot more. And then this is what makes them richer than common people and then very rich.
The point to be noted here is that not all rich people are rich from the beginning; they also start like common people, do jobs and save the most important money, then invest money in a good place. And invest back the returns you get from the investment. Similarly, he becomes rich from common people and then super-rich. Believe me friends; if you do the same then you too can become rich in the long term.
Why should we invest? | Why is it Important to Invest?
We have just learned that how rich people increase their money by investing. If we also want to increase our money in this way, then we also have to invest, but the aim of the investment is not just to become rich. Friends, another big reason for investing is inflation. Earlier a plate of food used to cost Rs 30, now the same food comes in Rs 70, what does it mean? It simply means that today's 70 rupees are equal to 30 rupees earlier. Yes, friends, inflation reduces the value of money in the same way.
We understand this with an example, suppose today we buy 1 kg of sugar for 80 rupees, but if the inflation rate is 10%, then after one year we will have to pay 88 rupees for this 1 kg sugar, or after one year we will have to pay 80 rupees. Will be able to buy only 910 grams of sugar. If we keep 100 rupees with us, then after one year we will have to invest 10 rupees separately so that we will be able to buy 1 kg of sugar.
Friends, common people do not understand inflation that is why they always live in lack of money. Common people are not able to increase their income as fast as inflation increases. Therefore, even while earning money, they always feel short of money. If we want our 100 rupees today to be equal to one year later, then we have to invest that 100 rupees today so that after one year it becomes 110 rupees. And we do not have to spend money separately to buy the same thing.
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Where should we Invest?
In India, people invest in only three things, first gold, second real estate, third is stock market, and these three types of people consider their investment as the best. But is it right to invest in all three things? Friends, we know that we invest so that we can get returns. So let's see how much returns have been given by these three types of investments in the past.
First of all, let's talk about gold; if we had invested 100000 rupees in gold in 1981, then today in 2021 its value would be around 42 lakh 70 thousand. If convert it into percentage return, then in the last 40 years, the compound return of 9.84% has been given. Similarly, if you had invested 100000 in real estate in 1981, then by 2021 its value would have been Rs 1 crore 10 lakh. If you convert it into a percentage return, then in the last 40 years, the compound return of 12.47% has been given. But friends, if we had invested 100000 rupees in the stock market in 1981, today its value in 2021 would have been around Rs 3 crore 76 lakh. If convert it into percentage return, then in the last 40 years, the compound return of 16.16% has been given.
This means that if we had invested 1 lakh rupees directly in Wipro Company in 1980, then you could have earned a return of 5000 crores. So a friend if we want to invest for long term then share market is the best place. What is the share market? And how does this work? I will write a detailed article about it.
Conclusion
This was our article on investment, in which we learned four things. First is that investment means to invest money in something so that we can get more return in the future, secondly, all the rich people earn money by investing their money and then earn more money by investing the returns again, Thirdly, we need to invest so that inflation can be avoided, and lastly it is best to invest in share market. If you like this article then do like and share it, and subscribe Million-$-Knowledge to get financial tips.
DISCLAIMER: This is an Education Program and is NOT registered under any SEBI rules. All the information we provide is for educational purposes only and you should consult your financial advisor before making any investment decision. Also, WE DO NOT PROVIDE any kind of Stock Advice or Stock Advice or Portfolios.
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