Saturday, September 17, 2011

Buzzingstock

Buzzingstock

Investment Basics : Savings, Investments and Inflation

Posted: 17 Sep 2011 09:53 PM PDT

Investing, Basics of Investing

Let me first start with the Basics of Investing.

Today, money has become one of the biggest necessities of life. With rising aspirations, numerous opportunities to spend and longer life spans, merely earning a good income is not enough; it is equally important to invest your money wisely to ensure that it generates a good return. So the terms Investment and Investment Planning are more in use these days.

Let us first understand the terms Savings, Investment, and Inflation.

Savings :

The money that is not spent out of earning is called savings. They are used to meet future needs and expenses. Another important feature of savings is that these can be accessed relatively quickly. Generally people keep these savings in Bank's Savings Account so that money is available to them whenever required.

Investments :

Investments help you meet your longer term needs and larger financial goals. There is some level of risk attached to all types of investments and this is what determines the returns you get on them. The higher the risk, the greater the chances of a higher return.

Inflation :

Inflation is the rate at which the cost of living increases and causes money to lose value. In other words, money will not buy the same amount of a good or a service in future as it does now or did in the past.

In simple language, the effect of inflation is that the prices of everything going up over the years.
Posted by Suresh at 10:09 PM

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