Not only should money be saved, but it should also be invested

Not only should money be saved, but it should also be invested: if this is not done, a 1 lakh rupee investment will be worth 22,000 rupees in 25 years

The importance of investing that money increases with the quality of the saving habit. If you invest, your capital increases yearly, whereas cash kept at home loses value over time. We’re going to tell you six such things that will prevent the value of your money from declining.

1 lakh will remain 22 thousand if you don’t invest.

If you don’t invest, inflation will steadily lower the value of your money. After 25 years, the value of one lakh will only be worth Rs 22,000, assuming an average inflation rate of 6%. You must invest in a location like this if you want to keep the value of your lakh rupees. where the annual return is at least 6%.

Read Also:- 2023 National Panchayati Raj Day.

SIP will turn you into a millionaire.

If you invest Rs 5,000 per month in a Systematic Investment Plan (SIP), you will become a millionaire in 25 years with an annual return of 13%. On the other hand, if you invest a thousand rupees per month for 25 years, you will receive Rs 22.71.

You can put your money into index funds.

If you don’t understand anything, invest in index funds that track the Nifty 50. This is a collection of the top 50 companies in the country. In the last five years, this very low-cost fund has returned an average of 18.2% per year.

only take money out when necessary

Only redeem the investment when cash is required. Don’t sell your investments if you’re worried about future returns being lower or the market being volatile. Every three years, investments in equity in particular typically yield positive returns.

investing in ELSS is exempt from income taxes.

Under Section 80C of the Income Tax Act, you may also be eligible for a deduction of up to Rs 46,800 if you invest in an equity linked savings scheme (ELSS). Up to Rs. 1.5 lakh of your investments are exempt from taxes each fiscal year.

Watch out for negative returns.

Negative return is the term used when the return on your investment is lower than the inflation rate. Consider the following scenario: You have a Fixed Deposit (FD) with a bank, earning a 5% annual return, but the retail inflation rate is close to 6%. This indicates that you are earning 1% less on your investment than the rate of inflation. Your money will lose value as a result of this. One must invest in a location where they receive a 6% return annually in order to avoid experiencing negative returns.