Generally, it is seen that young people give up investing, especially for long term. However, it is recommended that a person must start investing when they are young because, if money is kept invested for a longer time it gets more time to grow.
The basic idea of investment is to put your money to work for you. One should choose his investment mode or method in such a way that it gives best returns possible over a period of time, say a year or five years or 10 years or more. All investment do rise or fall over a short period of time. That is there is up and down periods in each investment.
Saving is to set aside a portion of your present earnings for future use and investing is to use that saving, in such a way that it grows over a period of time so as to beat inflation.
Many young people avoid investing in stocks for a long period. They only say that they are still young and have a lot of time on hand for investing. They don’t understand the value of early investing and compounding. They have long working life, approximately 35 years or so, for their investment to grow.
Following is the percentage of margin that you may get by investing in various avenues.
It is seen that equity have earned more than other saving instruments available over a long period of time and that too consistently despite its up and downs in short term. Let us see how much return one will get in different avenues that one can invest in.
Savings in banks will give you only 4–6% per year. While if you invest in fixed deposit then you will get 6–8% per year and mutual funds will give you return of approximately 10–15% per year. However, if you are investing in stock market then you will get 12–18% per year. You can clearly see stocks have the highest potential to beat inflation. Inflation is about 5 to 7% per year. You can make money in Indian stock market.