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Thursday, December 2, 2021
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    Investment from Savings: Good or Bad?

    It’s a common saying that “few drops together can make an ocean”.

    Consumption is autonomous whereas income is uncertain, so to cope up with this uncertainty investment is salient. It is always advised to save a part of your income and invest it. Money lying underutilized adds to the loss of its opportunity cost. Early investment is the catalyst to early wealth creation.

    Apart from all of these, newbie investors should be clear about their currency and near-future goals and contingencies so that they do not face a financial crunch. People should keep investing in stock markets, mutual funds, PPF schemes, and government bonds. The sooner we reach the level where our income exceeds our expenses it makes us financially independent. When you keep investing over a long time the returns appear to be indefinite. This is one of the biggest advantages of investment from savings The word stock market sounds so straightforward but is that tricky to understand and trade on.

    One can start understanding the stock markets with the terminologies. Without any prior knowledge, no one should get into the stock markets as it can lead to complete dilution of the wealth of the person. This is one of the biggest advantages of investment from savings. When an individual earns money firstly, he/she should segregate some amount for investments, savings, and minimum amount for expenses. The stock market has such attraction that once you start investing in small amounts and increasing your capital then you might go for whole capital employment and end up losing all the money.

    So, investors should beware of this. The money when accumulated from savings and invested will help the investor to meet his nearest goal or contingency. Saving and investing should go hand in hand regularly. 

    ALSO READ:   Stochastic modeling

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