Running & Investing – Why Should I Invest?

I still remember the year 2005, when I went to buy a pair of jeans. I asked for waist size 32 inches; however, it didn’t fit. The next choice was 34, it didn’t work as well! Finally, size 36 was my fit!

It took me some time to realize what has happened here.

Over the years, a complete lack of physical activity and neglect of my health had caused this alarming situation.

This was when I decided to invest in my health, took running as a hobby, and was back to waist size 32 with improved health parameters.

Physical fitness and longevity are essential ingredients in living a happy and active life.

Some benefits of adopting a healthy lifestyle:

– Reduce healthcare cost 

– Healthy life 

– Higher productivity 

– Prevent lifestyle/stress-related disorders

Taking care of your health should be priority, among others, such as your financial investment portfolio.

Why should you invest? 

The fact is most of us have a single source of income, which will not last lifelong. Eating from our income source is an invisible consumer called “Inflation”. 

Simply put, if today your monthly spend is Rs.1 Lakh (excluding EMIs) and inflation rate is 6.40% per annum (average inflation for last 10 yrs), thus to maintain same lifestyle 10 yrs down the line, your expense would rise to Rs.1.86 Lakhs per month! 

Have you planned for your cash flow needs? 

With this income, keeping effect of inflation in mind, we have to fund our various goals: essential needs (food, water, clothing, shelter, medicines, retirement, etc.) and desires (exotic holidays, foreign education, car etc.) 

These Needs and Desires can be further classified into buckets based on time frame;

– Bucket 1 Near term (within 0-3 yrs) 

– Bucket 2 Medium-term (3-7 yrs) 

– Bucket 3 Long term (7 yrs +)

If we fund our goals with our accumulated savings, we would exhaust most of our savings and compromise our long-term goals. 

This is why it’s crucial to not just keep money in savings bank but judiciously use it to make investments with potential to create wealth over multiple time horizons.

Content – Ajit Kaushal

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