While the last alternative is a form of investment income allocation is done now to benefit profit (return) in the future that can exceed the capital return for your investment today. With the investment return obtained, one can hope that prosperity (wealth) will be enhanced. Thus, if you allocate the income to invest will mean you reduce some of your consumption.
If you reduce the consumption level of satisfaction is not what you expect from the consumption will also be reduced? Then, why is it necessary to invest, and what are the real benefits of investing? Answer first and simplest is to ‘make money’. If you remove Rp.200 million capital today, then of course you expect to get your capital back plus a few dollars profit can vary in different types of investments. The more you dare to risk, the greater your expectations for return.
The second benefit is to protect your property from the negative impact of inflation. If there is high inflation, the tendency of prices of goods and services will increase, and could further reduce the purchasing power (purchasing power) of money you have. To protect your property from the negative impact of inflation, then you need to make investments. If for example the investment this year by 10%, so if you say menghaslkan investment return rate of 20%, then your wealth will not shrink, but rather developed by 10%.
The third benefit is to increase your consumption capacity. As explained above, your income can be allocated to consumption, savings, or invested. By investing now, you can expect to earn a positive return. The results of these investments can certainly increase your wealth, and means your ability to consume in the future are also getting bigger.
The fourth benefit is to prepare for your retirement. When a person enters retirement, general productivity will decline. In economic conditions like now, if only just rely on salary pensions are often not sufficient to meet all the necessities of life. Investing can be a weapon you to prepare for retirement as early as possible. The longer the time you make a preparation, the greater the investment that can benefit you get. Do not underestimate the money that only a few dollars at the moment, because if you set aside part of the discipline to invest your income on a periodic basis, then your money will multiply in the future exceed your expectations.
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