Investing is and has always been a way to earn one's personal and financial freedom. Yet, many of us not feel very comfortable when its come to talk on investing, assuming it is too risky, too time consuming. In this article, we will try to dig out how investing may enable our potential and other non-material aspirations.
Why people don't invest.
I heard this so many times people often says " Money is not important to me".In fact, in a well-established society where our income level is higher than our basic needs, it reduce money's priority. We tend to focus more on experience rather than physical goals. Why we do hours of work to earn money, when it takes away us from our personal space, friends and families. When the best time of our lives is now, why we mitigate our spending habits to save for the future. These questions are just the surface of the reason for why we don't invest. Before move on further its important to acknowledge them.
Let's try to find out these provocative questions. Why we try to find out discount on things we love in malls or retail store rather than just buying what we need? Why we spend less time with people that matter to us so rarely? Why we try to find cheaper meal in menu card when we go out for a date? Because we are helpless. We are constrained by the amount of time and less money resources that restrict us. In cut throat competition world we are too busy exchanging our time for money which is sufficient to keep us going. But not for much else.
What is not investing.
Investing is way to us to earn more time and more money with the least amount of effort. It is not something that will take away our time or money. Many working person who is spending 40 hours a week to get decent amount of income for things they love, but investing helps to reduce this amount of time gradually. We can spend 30, then 20, then 10 eventually negligible numbers of hours. While some of you ay argue that working is what i love to do, one question l like to ask those people, will this work protect your future completely. On the other hand, we have the power to choose whether we work or not, why one should keep themselves to busy in necessity of working. But, most of us cannot effort not to work. In such kind of situation investing is what enables us to work for free on things we love.
What investing bring us.
In corporate world there is saying " Money generate more money."
While you spend your time doing something else. Go to work and earn it, this is the common working routine that most people follow. Everyone is busy doing this. The question is everyone need to ask themselves, are you the engine of money making machine? Investing allow us to get things which we get after spend hours of work, this is what separates investor from worker. In other words, we can call investing a general modernization approach, in that approach we buy assets that generate more assets. An assets is something whose value increase over period of time, this could be a company's stock, government bond,real east, commodity etc. To buy a company's stock is required less amount of money rather than buying a real estate properties. Let's say you want to invest in TCS (Tata Consultancy services) which is quoted at ₹1675 per equity share, to buy stock of TCS you should have 1675 rupees in your working trading account. Buying a stock of any a company gives you rightful ownership. In our example, suppose TCS have 10 shares in the market and you have 1 quantity that means your ownership in TCS would be 10%. At this price of an expensive dinner, you can become owner of a large corporation. Sounds interesting.
The beautiful part of this catch is we don't need large amount of money to own that company but we can make ownership in company by buying its share. A company's share grants ownership in that company. Such ownership does not entitle us to go to TSC office, pick up the computer and walk away claiming it ours. It entitle us, to share part of TCS profit. Why ? Because we bought TCS' business in form of stock, so whatever TCS earn profit, the 10% portion of the profit is our. Keep in mind investors are not managers, like CEO and other officials, they don't get to decide whether they can take the profit or invest it back into the business. On the other side they have some power, they can hire or fire managers (including CEOs) if they do or do not perform well. Management is responsible for company's smooth operation and its profit. It's depend on company's management whether they share profit with shareholders or keep that profit and invest it back to company for future business expansion. Money invested back into business, would normally increase the value of the business. Mostly, companies share their profit in form of divided. One more thing, companies are not restricted to share dividends with shareholders.
How we make money in share.
While many external factor like Recession, current business situations, Government policy and other factors effects the price of a share. if we, investors feel at any point of time that the business of a company is not performing well, we can exit from that company by selling its share at any time. An investment is consider to be as great investment if its worth increase compared to the moment of purchase in a reasonable amount of time. There is no restrictions on buying and selling shares. There is lot of benefits to keep a stock for long term horizon, in long run your investment value will increase with reasonable growth and often you enjoy dividends on a scale of 0-10% annually on the stock price.
Conclusion.
This article aims to demonstrate that investing is a worthwhile subject to study for an ordinary individual if his or her objective is to achieve financial independence. I hope my this article will help many individual to understand how investment can help them to achieve their future life goal. Stay tune for more updates.
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