Why most of the Indian are not Smart Investors?

Savings vs Investment

I was recently creating a project for Welingkar Institute as I have joined MBA distance learning program. I was watching videos of various industry experts, professors, entrepreneurs, alumni etc. Some entrepreneurs have shared their experience, how they started their businesses and made it successful by innovative, integrative and strategic management then I came across one of the videos of Prof Raj Kumar and explained about the topic Savings vs. Investment.

Prof. Raj Kumar is expert in the field of Investment, Fund Management, Wealth Management etc. He has explained how Indian are good savers but bad investors. We all have been told to make saving since our childhood but no one has ever explained where to invest the money smartly.

When we invest money we never consider the inflation growing around us. Inflation increases at the speed of at least 9% per year. If my this year spend per month is Rs. 10,000 then I will have to spend around Rs. 10,900 next years and in the next following year I will need to spend Rs. 11,881. In this way the spending is increasing year by year.

Live Example: If Mr. Arun saved Rs. 100,000 in 2006 and didn’t invest and kept money at home idle then the Mr. Arun’ saving after 10 years i.e. in 2015 would be Rs. 38,742 (if inflation rate is 10% per annum). Suppose we have Rs. 100,000 in hand and if don’t invest then we are bearing a loss of Rs. 61,000 in ten years. This is why we need to invest our money smart to cope up with inflation.

Year Money Depreciation
2006 INR 100,000
2007 INR 90,000
2008 INR 81,000
2009 INR 72,900
2010 INR 65,610
2011 INR 59,049
2012 INR 53,144
2013 INR 47,830
2014 INR 43,047
2015 INR 38,742


How to Invest Money Smartly?

We need to find various ways to earn smart returns on investment every year. We have to start investing money now onward to gain a future benefit from it.

Ways to invest money:

  • Fixed Deposit
  • Real Estate (Land, Homes)
  • Life Insurance Policies
  • Kisan Vikas Patra
  • Public Provident Funds
  • Gold
  • Mutual Funds
  • Equity Markets

Things to be Remember while Investing:

  • Your ROI on investment should be more than Inflation Rate (10%) i.e. if you have made a FD of Rs. 100,000 at (9% per Annum) and if inflation rate is 10% then you are actually getting a 1% loss.
  • Don’t invest borrowed money
  • Don’t invest in fake schemes (Returns more than 20% per annum)
  • Do invest in long-terms savings plan if you are 20+
  • Do invest in short-terms savings plan if you are 40+
  • Try to get ROI greater than inflation rate
  • A penny saved is penny earned (Quote by Warren Buffet)
  • Don’t take loans if not needed
  • Don’t use too many credit cards (credit card debt may affect credit score)


Prof. Raj Kumar has greatly explained how to invest to cope up with future expenditures. If we start investing for future expenses then we wouldn’t need to depend on others when we are aged and need medical expenses. Start investing when we you are young then it will provide you great benefit when we would retire.

Anurag, with more than 7 years experience in the field of Digital Marketing, is a B.E (IT) from Mumbai University. Currently pursuing an MBA, he has over the years mastered the art and science of targeting the online customer, be it through SEO, SEM, SMM or other online media. A certified professional in Google Adwords & Analytics and Hubspot, he brings tremendous value and thinking to brands that want to optimize the use of the online medium.

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