Money doesn't grow on trees, it can grow when you save and invest wisely.("21st century is the century of investments")

• >  What Is Investing?

  Investment is a means of putting money or capital in a project or enterprise with an expectation of making additional income or profit.

  Growing up, most of us were taught that you can earn an income only by getting a job and working. There's one big problem with this: if you want more money, you have to work more hours.

  However, there is a limit to how many hours a day we can work, not to mention the fact that having a bunch of money is no fun if we don't have the leisure time to enjoy it!. You can't create a duplicate of yourself to increase your working time, so instead, you need to send an extension of yourself - your money - to work, increasing your earning potential.

• >  Are Investment and savings the same?

  What is important is, to remember that Investments are not like savings in the Bank Account where your money grows at a certain fixed rate (called Interest Rate) every year which would barely be a few percentage points above the rate of inflation. In a way inflations eats up the extra little interest which is earned on the deposits in the bank.

  Hence to really make your money work for you, you need to think of investing your money so that it grows way faster than inflation.

• >  Investing is NOT Gambling

  Gambling is putting money at risk by betting on an uncertain outcome with the hope that you might win money, solely relying on luck rather than hard work. A "real" investor does not simply throw his or her money at, he or she performs thorough analysis and commits capital only when there is a reasonable expectation of profit.

• >  Why Bother Investing? The logic behind investment!

  The value of your money is judged by its buying power meaning, the value is judged by the quantity of goods or services you can buy with it.

  Just looking back..an apple bought for Rs 5 about 10 years back is nearly Rs 20-25 now.. a whopping 400 % >rise!! (due to inflation)

  Investing lets you take advantage of one of the miracles of mathematics: The Power of compounding.

  Albert Einstein called compounding "the greatest mathematical discovery of all time"

  Compounding is putting back the profits you get with each investment back into the market, there by increasing your investing capital and future earnings.

  Let's make it simple, Rs 10,000 that earns mere returns of 20% per annum becomes Rs 30,000 in ten years whereas Rs 10,000 compounding at 20% per annum turns out to be Rs 62,000 in ten years!

  Letting Rs 10,000 in the cycle of re-investment for a longer time, it compounds to 62,000 in ten years, Rs 1,54,000 in 15 years and Rs 3,83,000 in 20 years.

  The more time your money stays in the cycle of re-investing, the more you are able to accelerate the income potential of your original investment. The astounding returns you will be getting is easily see in the table given.

  The Power of Compounding

  YEARS	Investment Every Successive Year + Profits	Profits at 20% Per Annum	Continuing Investment annually	Total Amt. carried for reinvesting next year
  1	10,000.00	2,000.00	10,000.00	22,000.00
  2	22,000.00	4,400.00	10,000.00	36,400.00
  3	36,400.00	7,280.00	10,000.00	53,680.00
  4	53,680.00	10,736.00	10,000.00	74,416.00
  5	74,416.00	14,883.20	10,000.00	99,299.20
  6	99,299.20	19,859.84	10,000.00	129,159.04
  7	129,159.04	25,831.81	10,000.00	164,990.85
  8	164,990.85	32,998.17	10,000.00	207,989.02
  9	207,989.02	41,597.80	10,000.00	259,586.82
  10	259,586.82	51,917.36	10,000.00	321,504.19
  11	321,504.19	64,300.84	10,000.00	395,805.02
  12	395,805.02	79,161.00	10,000.00	484,966.03
  13	484,966.03	96,993.21	10,000.00	591,959.23
  14	591,959.23	118,391.85	10,000.00	720,351.08
  15	720,351.08	144,070.22	10,000.00	874,421.29
  16	874,421.29	174,884.26	10,000.00	1,059,305.55
  17	1,059,305.55	211,861.11	10,000.00	1,281,166.66
  18	1,281,166.66	256,233.33	10,000.00	1,547,400.00
  19	1,547,400.00	309,480.00	10,000.00	1,866,880.00
  20	1,866,880.00	373,376.00	10,000.00	2,250,256.00

  
  
• >  What are the normal investment opportunities for individuals?(Types Of Investments)

  There are many different ways you can go about making an investment. This includes putting money into stocks, bonds, mutual funds, or real estate, or starting your own business, technically called "investment vehicles. The goal is always to put your money to work so it earns you an additional profit.

• >  Bonds and Bank Deposits

  They are grouped under the general category of fixed-income vehicles; they are commonly used to refer to any investment and profit that are founded on debt and interest. The rate of return is lower than other investments.

• >  Real Estate & Gold

  The only real mode of investment over the last few years world over has been Real Estate while most people buy their houses, some venture in buying in land and commercial Real Estate.

  While it is profitable to invest in land, it usually takes 5-15 years to appreciate significantly. Also Real Estate tends to be relatively non-liquid (which means it cannot be sold immediately at a good rate if you are in need of money suddenly). Also buying land requires substantial amount of money, people with limited resources will find it difficult to invest in this sector.

• >  Stocks

  Investment in the Stock Market gives you an opportunity to gain significantly in a time frame of 4-5 years, which is what most of us are looking for. The gains can come faster for those who do sufficient research and invest prudently.

  As against trying to start or run your own business which you might wish, investment is about letting your money aid the business to grow and hence derive profit from the investment. So as an investor, one does not need to do all the hard work required to run a business, but one does need to figure out which are businesses that have higher probability of doing well, and hence invest accordingly.

  The "power of compounding" is what makes investing in stocks very attractive, putting the profits along with capital year on year in the cycle of re-investment leading to compounding profits!!

  However, the best part about the Stock Market is that it is very liquid, and any additional money can be pumped in for a short period to derive benefit. Conversely if an investor in the Stock Market requires money suddenly, he can encash it from the market at short notice (almost immediately). Also investing into stock market does not require a large amount of cash, you can invest even as low as Rs100.

• >  Mutual Funds

  A mutual fund is a collection of stocks and bonds. When you buy a mutual fund, you are pooling your money with a number of other investors, which enables you (as part of a group) to pay a professional manager to select specific stocks for you.

  The primary advantage of a mutual fund is that you can invest your money without the time or the experience that are often needed to choose a sound investment.

• >  Alternative Investments: Options, Futures, FOREX,

  These are high-risk/high-reward securities that are mostly speculative trading than investments. Experts and professionals generally agree that new investors should focus on building a financial foundation rather than speculating.