Investing Money is Not an Option, it is a Necessity

We devote more than 20 years in education, study millions of pages but none teach us the most important lesson of our life, how to become financially rich. One may be academically a genius but that does not guarantee his financial intelligence, because neither in school nor in our homes are we taught the theories of becoming rich. What is the problem, why are people ignore teaching their children the most important thing of life? From our childhood we have heard our parents saying "study hard and get a good job". When any mom says "Go to school, get good grades," she definitely intends to say "Study hard because this in only thing going to make you rich". Our pattern of education does not give emphasis on making their students "Financially intelligent". This is because, I believe, very few people have this intelligence. So how they can teach? They themselves are ignorant.

Being financially intelligent means controlling your cash-flow (money in and out of your pocket). In other words financial intelligence is nothing but your ability to "manage your money" so that you become richer every day.

This Idea of getting richer every day is very tempting. When I say "getting richer every day" it calls for investing your money. Invested money is like your slave, who works 24 hrs making your money grow. Your money safely kept in the locker is not growing. Instead the eroding effect of inflation of money makes it weaker every day. (1) To prevent your money from this eroding effect of inflation (2) To make your money grow one must invest their money. Invested money makes more money.

The question is where to invest the money. For this one must know the investment options available in the market.

o One can invest in shares /equity directly in the share market (either online or through a broker).

o One can invest in equity through mutual funds, one can invest in debt linked schemes through mutual funds, bank's fixed deposits, companies fixed deposits.

If a person invests in Debt funds it means he is either investing in Company bonds, Fixed Deposits, Debt linked mutual funds, bank bonds, municipal bonds, central/state government securities etc.

As the name suggest companies/Institutions line central government, state government, Private/Public sector companies, banks etc needs funds to run their daily business. They issue securities/certificates against which we lend them money against a chargeable interest. Mainly in Debt market we lend money in the form of DEBT. The interest promised by companies, banks, government here is secured.

In Equity market we buy shares instead of certificates. These shares makes us a proportionate owner of the company of which we buy shares. Here also we lend money to the companies but like a owner. If companies makes profit we gain interest and if the companies makes loss we loose money.

In short you can say in DEBT MARKET investment is very safe but gives low but fixed returns. In EQUITY MARKET investment is linked with a risk but when market if good given a much better returns than DEBT schemes.

If you want to invest in shares market you need to have 3 things

(1) Spare Money - That even if you loose this it will not hurt. (2) Demat a/c - In this account you can 'store' you shares (no papers) (3) Trading a/c - You can 'buy & sell' shares by this account

To open a demat a/c - Ask your bank (where you maintain a savings a/c) for opening a demat account. These days nearly all banks provide this facility. They will charge a very nominal amount from you for this service.

To open a trading account - Approach a online share-market broker or else, safest and reliable will be your bank. Some banks has their own trading accounts or they have a collaboration with some online brokers. Approach your bank and ask for details.

The bottom line is "Your Bank" is the best choice. They can be your best guide & support. Give a call to your bank (or visit), tell them that you need to open a demat & trading account and the rest will follow.

The author of this article is a part time investor and a great believer in the concept of financial independence. He had started a unique website of his own and generates and healthy revenue out of it. You must visit Investment

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