“Investment” – This word is much used and often much abused one. One keeps on hearing this almost all the time be it in office or catching up with friends or attending a family functions – almost everywhere. More so when we are fed with lot of information about how one needs to make money work to get more money.
However, for a lot of people, the clarity on one question is often lacking – What is the purpose of investing?
Based upon my observations, below are some of the most common purpose of investments (in no particular order)
- I invest because there is some sufficient funds lying with me and I can get great returns.
- I am investing for some specific goal – buying a house, education of kids, marriage of kids and so on.
- I want to buy that one thing I have always dreamt of (e.g. a BMW)
- Being financially independent – So that sometime in not too far future, my investments can take care of all my expenses.
- I want to get rich quickly, like double my money in 6 months.
- I want to insure my life. And get money back if I live beyond that insured period.
- Planning for retirement, as and when and if it comes.
- I want to retire early, so I need to be prepared.
- To get enough money to travel the world.
- Getting initial capital for my business ready.
- Save taxes as XYZ investment offers tax benefits.
- Investment? I have started a SIP. And I have company PF. Rest I will begin once I close my personal loan and car loan. And I am planning to upgrade my car next year.
- I invest because everyone is doing so.