How to make your money work for you

Everyone works to earn money and this process goes on for whole life. Wouldn't it be nice that the money we have earned start working for us, so as to have the spending power of your income increase with time and also you have to work less and earn more?

So how can we make our money start working for us, generally we keep our left out money (left after the spending) ' in traditional saving routes, or we invest and make our money work harder. Thereby, getting more money in future which can be spend on the new gadget, the international holiday, education, marriage, or anything that money can buy.

Simply put, Investing can help you increase your spending power. So first let’s understand more about the difference between saving and investing.

 • Saving is placing our money in traditional saving instruments, like Bank Saving Account, Fixed Deposits etc.

• Investing means directing our money to suitable investment solutions which may deliver better returns over a period of time.

As we all know that there are several external factors which can impact our income as well as expenses. Investing could help us to improve returns and let us enjoy the following benefits:

1.            Manage Inflation

Cost of living is increasing continuously, and no matter where we live, everything around has become more expensive. So, over time, we need more money to buy the same quantity / quality of goods or services. Returns earned from our investments can enable us to manage  inflation-related financial burden better.

2.            Manage Personal Financial Crisis

Personal emergencies sometimes cause financial stress. An emergency fund, through the returns on the investments, can help manage some of these financial stress.

Normally Emergency fund should equal to be= three months regular expenses which can be kept as ready cash at home (about 20-25% of the fund amount) + investment in a highly liquid investment solution to withdraw whenever the need be.

3.            Enjoy Unearned Income

Interest, dividends, bonus, capital gains, etc can be indirect income which can be used during a financial emergency or for managing inflation or for creating wealth. Some of these income also comes as tax free income so that we don’t have to pay tax on the additional income.

4.            Fulfill our Financial Dreams with Minimal Burden

Once we start earning, we start making plans like; owning a car, taking an international holiday, buying a house, planning children’s education or self-retirement and so on. And with every increase in the income, the list only gets longer. Investments, big or small, made over a period of time, can enable us to make our dreams a reality.

5.            Create Financial Security

Financial Security comes with Investing, no matter how small we begin, it gives a sense of stability and security in mind, as it creates wealth that can be used for our planned / unplanned financial goals.

Most dreams are linked to money and by regularly investing a calculated amount of our income in appropriate investment solutions; we can make our money work as hard as we do towards achieving your goals.

It is very important that make Informed Investment Decisions and Invest Correctly so that our hard earned money works harder for us.