It is always recommended to start early investing. Looking at the world which next generation is going to inherit, you should less expect children to take care of you in your old age. Your email address will not be published. Costs of medical treatments have risen so high that it is beyond the budget of middle class salaried person income. Firstly, an investment create lot of job opportunities where people of the country gets a chance to work and at the same time this opportunities increase their income as well as the national income. Investment is important for an economy because it generates lots of positive effects for the economy. SEVEN (7) IMPORTANCE OF INVESTING IN AN ECONOMY You will agree with me that we live in an unstable world where things quickly get stale and obsolete as soon as they stop being fully engaged. No votes so far! How to Calculate Compound Interest and Simple Interest? It is pretty sure that this era is not for people who are merely hard working but this win-win generation is about people made up of recipe with smart work and smart investing.
Meaning and Importance of Investment: The level of income, output and employment in an economy depends upon effective demand, which, in turn, depends upon expenditures on consumption goods and investment goods (Y= C + I). During olden days, around half a century back: “Investment Important for Economic Growth due to 3 Main Core Factors”: Your email address will not be published. What is the Difference between Trading, Investment and Speculation? Be the first to rate this post. Things are not same as it was previous days, now a day’s most people work for a private corporation where there is no guarantee of job security. In the nature of the case, public investment is independent of the profit motive. The significant role of public investment, also called the autonomous investment, which the Government may incur to save the economy from falling further to lower income levels, comes to the forefront. Investment definition never says that you must require enormous amount for investing. Investment important for economic growth due to all this causes and effects. Since a steady investment is essential for the investment multiplier to have positive effect on income, output and employment, … What are the Legal Matters you should know before Investing? Importance Of Investments in Economic Growth Investments affect the rate of economic growth as it is an essential element of aggregate demand (AD). Financial planning is a very broad concept whereas investing money is merely a piece of a pie chart diagram. The level of investment in an economy tends to vary by a greater extent than other components of aggregate demand. This means that businesses, entrepreneurs, and capital owners will require a return on their investment in order to cover … Required fields are marked *. 3 Factors: Why is Investment Important for Economic Growth and its Benefits. In those times, whether they were aware of investment or not it hardly matter since they had a regular income coming along to take care of their children and educate them, purchase a house, medical necessities. The main determinants of investment are: The expected return on the investment. Long-run Aggregate Supply (LRAS) is the expenditure on capital investment. Read E-Learning Tutorial Courses - 100% Free for All. How Positive Attitude can improve your Investing mindset? 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This modern world which you pass-on to next generation would be even faster and competitive then it is today. IMPORTANCE OF INVESTMENT FOR ECONOMIC GROWTH: EVIDENCE FROM PAKISTAN Going forward we will keep on explaining different various pieces of financial planning pie chart diagram. Investment important for economic growth due to all this causes and effects. In this internet world you need to work extremely hard to fulfil future needs. In current times and in current private job, you have to take care of your family, old parents, children, children education, medical expenses and many more. A greek, passionate blogger and traveller who loves to travel around the world to enhance knowledge and to share information thru various writings. We have seen our parents working whole life. Ways to Invest your Money and Make Profit, Best Investment Opportunities for your Retirement Income. It significantly affects the productive capacity in the economy. When they get retired, they get handsome of benefits as a cash to look after their expenses after retirement. You will need to create a good wealth by investing so that in near future during jobless period or retirement age your money will work to generate regular income for you. How to Calculate Stock Market Returns and Break Even Point? Resource or assets quickly deplete in value if they are not stimulated. So in conclusion, It is very much clear that when you work for the money at the same time your money also should work for you to fulfil the future necessity of this era. Should you Borrow Money to Invest in Stock Markets or Funds, 5 Rules of Thumb - To be consider before making Investments. It is always recommended to start early investing. Next step is to set your short term and long term financial milestones and draw a road map of your target. Different Types of Investment Risks Involved in Investing. Thus investing is necessity to secure your present and future needs. When you decide to invest wealth your half of the road map is completed with your regular savings. People use to stick to one job for very long time maybe it is government job or private job where job security was guaranteed. For now you can read our next tutorial session to get knowledge of various investment options and different ways to invest and make money. Rule of 72, 114 and 144 of Compounding Interest formula. You can start systematic investing with your budgeted saving. Now a day’s, investing is necessity of life. We are sorry that this post was not useful for you! Through investment, the benefits discussed below can be easily realised. Investment is a sacrifice, which involves taking risks. Investistment is very important in a country's economic development: It's the main source of employment creation and the main factor of economic growth. So in conclusion, It is very much clear that when you work for the money at the same time your money also should work for you to fulfil the future necessity of this era. Proper financial planning with clear milestones can be set only with proper knowledge of investment options which suits you best, risks, risk to reward returns, etc. This is because the underlying determinants also have a tendency to change.