Investing means making your money work for you to get better returns. We often lack financial literacy in our formal education and often confuse ourselves between savings and investing. To understand the basic difference between investing and savings one must understand assets and liabilities.
Assets are things that increase in value over time and liabilities are the opposite. Money sitting in your bank account as savings can be a liability if the interest you are getting on it from the bank is lower than the rate of inflation.
Let's take an example for understanding
If you saved 100 Rs in your bank account and the interest given by the bank is 5% and the current rate of inflation is 8%. The value of your money is decreasing by 3% hence savings is the worst mistake that we can do for our future.
If you invested the same amount in some assets that give better returns like equity, mutual funds, etc you'll be able to make a 15% return which is higher than inflation and a step towards financial freedom.
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