Why Investing?
There are so many people out there talking about investment, best way to generate passive income and to increase earning. Even there are so many experts and analysts out there providing tips and information to support investors in making good investment decision. We used to see rich people are still investing although they are already wealthy. But what are the reasons that made the rich people keep investing?
1. Money to work for you
Most of us are working for money and only get paid if we have performed our job well. Due to the high living standard, our pay might not be able to sustain our current living standard. How can we acquire additional income for ourselves?
It’s time to let our money to work for us. Putting money into the right investment program can generate additional income in the form of capital gain, interest earning, dividend and rental. In other words, we are using money to make more money instead physical effort.
2. Beat inflation
We define inflation as the upward price movement of all goods and services in an economy. When the inflation rate increases, our purchasing power will be reduced because the goods and services has become more expensive. With the same amount of money, we can only buy lesser quantity of goods as compared to before.
If the inflation rate in Malaysia is estimated at 4% p.a., the value of our money will be depreciated at the same rate. Therefore, we need to preserve the value of our money by putting it into any investment that can generate return of at least 4% or more. Any higher return on investment (ROI) will be our bonus. For example,
If your return on investment is 12% p.a. and being offset by Inflation rate: 4% p.a., your actual return would be 8% p.a. This is also considered as a bonus from your effort to hedge against inflation.
3. Financial Freedom
Although we have a job and get paid every month, not all of us are able to sustain a good financial health. Working population are tend to overspend and having too much debt. Unless with good habits and disciplines, an individual can stay away from any financial concern.
The key is to develop a system to ensure healthy cash flow and let our money to sustain on its own (i.e. investing in unit trust, commodities and real estates). Robert T. Kiyosaki, the author of ‘The Rich Dad and Poor Dad’ said, “to achieve financial freedom, we shall create as much multiple sources of passive income as we can.” In fact, we can always assign this difficult task to a professional manager.
Summary
People are investing is simply because they want to have sufficient earning to achieve certain standard of living. At most of the time, earning income from our employment alone are not enough to maintain our standard of living due to the rising inflation.
The only way is to put our money at work, converting it into a form of asset and let it appreciates in value. For more information and further investment opportunities, please visit ING Funds (Malaysia). Happy investing.
Incoming search terms:
- counterfeit pamp
- three reasons for investing money