highlights
Inflation increases by an average of 6 percent each year.
Sometimes it can be above or below.
In the long run, it becomes more expensive and the value of money falls.
New Delhi. Saving is becoming very important in Indian households. It has always been believed that capital saved today will work in the future in times of need or hardship. This thing seems right from a short-term perspective, but when we put this lesson in the context of a few decades, there are some flaws in it. People are now becoming somewhat aware of this disadvantage. After a long time the value of your saved money will not be the same as it is today. Inflation, or the rate of inflation that rises at a fixed pace over the long term, will do the trick.
Suppose you have saved Rs 1 lakh. You kept it for 25 years to use in the future for your kids or for emergencies. Now apply the average inflation rate of 6 percent to these savings. 6 percent because that is the maximum limit for increasing the RBI’s inflation rate.
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However, in the recent past we have seen inflation consistently exceed this rate. However, if you invest an inflation rate of 6% in your savings, that amount will only be around Rs. 23,000 in 25 years. Today you can get an item or service worth 1,00,000 rupees after 25 years for about 4.30 rupees.
Goods worth Rs 1 lakh after 25 years. (grow)
save not invest
Saving is the best option for short term. You can use this money at any time. It should be run like an emergency fund. But when looking to the future, it is necessary to understand the importance of investing. You must choose such an investment option where you can earn at least 6% annual return. However, now we have many investment opportunities that generate much higher returns.
some investment opportunities
You can invest in government savings plans. These aren’t just savings plans. With these, a return of 7 percent or more is also possible. Money is safe here too. There are also FDs from your bank. However, his interest rate depends on the repo rate, and even then he always gets more than 6 percent interest. The stock market is considered a very safe long-term investment opportunity. You can also invest in stocks directly by buying stocks. But a less stressful way is through mutual funds. This is also where you get the highest returns and money is generally safe.
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Tags: make money, investment tips, Investment funds, personal finance, save money, stock market
FIRST RELEASED : May 6, 2023 8:37 am IST
