Does the word Investing ring a bell to you? Well, for most it almost sounds like an alarm! Because the only reason most of us seem to be investing is to save tax and that is what is actually draining out money from your pocket. There is absolutely nothing wrong in investing to save tax. However, under this garb of fear of losing money to government we actually end up saving quite less than what we could have. Had we looked beyond the prism of tax slabs, perhaps a better horizon would be visible. Nevertheless, the root of this problem is not tax. It is the financial illiteracy that makes us scared of tax.
If one has read the famous book by Robert Kiyosaki “Rich Dad, Poor Dad”, one would realise in what utter darkness we invest the most important component of our life and reason enough to learn few ways that can help us increase our knowledge in money and hence, investing.
This world has made the word money slang. Though we all know we slug 10 hrs in our office far away from home everyday for money, naming the fact is being selfish! With this mindset, we can definitely not learn the lessons where money is the core. Therefore, it is essential that we understand that money is not dirty. In fact, it is the very centre of our being. No money, no luxury. Forget luxury, we won’t even have shelter above our head. To damn the green bucks is to damn your existence. We all work hard for it. So let us respect it.
How many of us run to our accountants to decide the fate of our hard earned money every year end? I guess, almost all of us! If we try to enrich ourselves with some knowledge about our money, year ends would be a time for enjoyment rather. It is imperatively important to seek out extensive knowledge about finance. Finance newspapers and magazines are an excellent source of information. They not only cover the latest happenings in the finance world but also give new and exciting ways of investing – every salaried individual’s dream!
If you thought investing means putting your money in fixed deposits, life insurances and few mutual funds, then you are in for a shock. The market for investments is huger than one can imagine. It all depends on deciding your assets and liabilities. It is here that most of us fail to recognise the opportunities and smart people like Robert Kiyosaki could. He retired with loads of money in his locker at the age of 40! That is why investing is called an art. The first step to master this art after you have armed yourself with proper financial knowledge would be recognizing your assets and liabilities. Assets are those that would out money back into your pocket where as liabilities are the ones which drain out your money.
Liabilities are often very easy to point out. It is the asset that cheats everyone. Most of us have big liabilities in our finance sheets that we willingly invested in thinking they are assets. The best example would be buying a house. Because when you retire, though your salary drops down suddenly, the EMI of your home loan doesn’t. So at a time when every penny counts for your old age, you end up giving fat cheques for the house that you thought will actually help you save! Therefore, it is of paramount importance to differentiate between assets and liabilities before you go about investing.
Lastly, it is important to note that it is not necessary that only the tried and tested ways are the only trusted ways of investing. Money can grow exponentially if it is invested smartly. Start looking beyond fixed deposits. That’s where the big bucks flow!