Why Investing is Important? and the difference between Saving and Investing.

Saving v/s Investment

As Richie Rich said Money is the best invention ever. So, No man on earth alive would be denying the money making its way to our homes, lives, and pockets? But the hardcore truth is no money is easy money except the one generated from tactful and strategic investment which again needs a lot of beating the brain out to understand the basic know-how.

Before we dig deep into everything technical, lets us just emphasize on the fact why you should invest!! And clarify that the fact that the pennies we put into our piggy banks in not investing. 

Generating Money!!

For starters, Money can be generated in two ways in our world. The first and the most predictable one is to the boring Bring Home the Bacon way by doing a 9 to 5 job. Second and the smart way is to wisely use piggy bank chunks called saving for investment purposes.

Many people get confused about whether saving or investment is the same? No!! They are not!! What one oughta do? Go for saving or investment? Before taking such a decision let us understand what do those terms mean?

Savings V/s Investment


It is part of your income that you are left with after meeting your dailies spending. It is meant for future use for something specific like impulse shopping, breakup makeover, fun holiday, or any unexpected Mishaps like Scooter Repair, Broken laptop Screen and stuff. Usually kept aside as Cash in the corner under the pile of clothes or in bank accounts.


 It is part of your saving that when utilized with informed knowledge like a wise owl would grow its value over time. Penny Pinchers saves money by putting constantly every penny saved from an expense to the saving accounts, which is not bad but also will not generate fruits for you. Money lying idle in a bank account is an opportunity lost as it won’t earn a good load amount of interest on itself magically. 

So investing money smartly to get good returns out of it, is an art and need of an hour for a prudent adult. Putting money in vehicles called financial instruments earns a higher rate of return. If you’re not investing, you surely are missing an opportunity to enhance your financial worth. 

Why Adults should invest?

The zillions reasons for an adult to invest includes

  1. Creation of Wealth: Since in the Modern world, just earning money is not enough to meet our bucket list goals. You pour blood, sweat, and tears onto your work for the income you earn.

But that might not be sufficient for the fulfillment of your aspiration. Make Money work for you. Most financial instruments like stocks, deposits or bonds have an appreciable rate of return and are right to do the job.

2. To beat the inflation: The money kept idle in your current account, it would lose its purchasing power over time due to the growing cost of living. So we need to make the money grow its worth. Hence Inflation makes the wealthiest people richer and the general masses poorer. So why not invest in it, because as I see it’s the only thing going up!

“Inflation is when you pay fifteen dollars for the ten-dollar haircut you used to get for five dollars when you had hair “

Fun Fact- There are many inflation-protected investing options such as inflation-indexed bonds or Treasury inflation-protected securities (TIPS). These types of investments walk along with inflation and therefore are immune to inflation risk.

3. To Finally Cross of bucket list goals – We all set a list which has both planned and spontaneous goals like buy a house, Get a luxurious car and Backpack around the world. These goals require Huge and heavy wallets filled only and only with banknotes at that point of time, so investing help you achieve your goals quickly without you having to work all your life.

4. Be part of New Ventures– All Millennials today are rushing into the startup culture. Look around yourself, you will find a flood of people who have many innovative ideas. These people could be your friends or acquaintances and might be are looking for capital for the execution of their business plans. You can always be the angel investors for such entrepreneurs. Being an active or passive participant in such startups is your choice.

5. Save for Your Retirement Plan– In the long run, to have independent and relaxed retirement life, one must invest. Putting your your savings into a portfolio of investments such as stocks, bonds, mutual funds, real estate or Gold, etc. At retirement age, one can live off on these funds stress-free.

Based on tolerance of risk, you may go for being riskier at a younger age with your investment strategies. Greater risk at a younger age increases the chances of earning greater wealth. Becoming more cautious with your investment is wiser as you grow old, especially near retirement age.

One would wonder when the right time to start investing is. I say there is nothing like the right time. The sooner you invest, the better it is for you! Because money has the Superpower to grow, let money multiply with time.

We, young Adults, procrastinate this necessity to invest. Be it Bill Gates, Steve Jobs or Walt Disney, they knew the importance of money management and investment. It’s always the attitude towards money management that will differentiate a person from the herd of ignorant. To all the youngsters and college grads, please don’t wait up to get a degree and then a job. Start investing early even by little.

Imagine a situation where an 18-year-old saved 1000 bucks from your pocket money by saving every penny from a party attended or suppressing the impulsive shopaholic within you. Say you add this 1000 bucks to a Fixed deposit which gives 8% interest and by the time he retires at age of 60 this 1000 bucks will be transformed into 25339/- 

Investment Rate Years Amount
1000 8% 12 ₹2,518
1000 8% 22 ₹5,436
1000 8% 32 ₹11,737
1000 8% 42 ₹25,340

These, my friends, is called the magic of Compounding. (The Compound interest you studies in class 8)

Also, the fixed deposits are the most basic risk-free investing option with lower rates. A person can always go for higher returns options according to their risk-taking appetite.

Hence it is the power of compounding and time. The original investment earns interest and the interest earned magnetically brings more interest. This benevolent cycle goes on and on.

So, it is high time to stop pouring the money down the drain and start investing. No matter how small the first step is, just take a leap of faith and welcome to the world where money could be created magically.

Stay tuned for more insights on investing essentials and tips, different options that could be explored, their respective returns and much more.

Happy Investing!!


Please enter your comment!
Please enter your name here