Finance
Posted 23 Jul 2019, Editor's Desk
Introduction
Everyone is running after earnings, but sadly
no-one wants to invest in learning. If you invest in your learning, earning
will follow automatically.
''Best investment in your cash can anytime Crash, but the Best Investment in your Brain will give you the highest Gain.'' - Dr. Vivek Bindra |
To understand the reason of why invest in yourself, read through the complete article.
Compounding Inflation
Compounding inflation shaves off your saving accounts. Before understanding compounding inflation, let us understand what is compounding effect.
When interest is applied to the interest of the principal amount, it is called compounding interest. This is the compounding effect.
So, inflation is decreasing your buying and
purchasing capacity. It is eating away the actual value of your money.
Let us understand this with the help of some examples.
For Example In 2000, the average fee of doing an MBA from an average college was Rs 200,000. The consequent salary package of that MBA student was Rs 300,000. In 2015, the average fees of doing MBA was Rs 2,000,000 and the salary package that MBA students got was Rs 900,000. This shows that the cost of education has increased 10 times but the cost of earning has increased only 3 times. This is called inflation. Inflation is not just reducing your return on investment but it is also including negative growth. Example: If the inflation rate is 8% and you are getting a return of 4% on your savings account. This implies that you are de-growing by 4%. It means that 50% of your money value is de-growing. You are not experiencing growth in your life because the rate of inflation growth is higher than or equal to your salary growth. |
If you are growing with compounding growth, then
the inflation will become very small and you will become powerful.
Suppose 3000 Assistant Managers are promoted after every 3 years turn-by-turn in the car manufacturing company.
By this logic, there should be 3000 Directors and
3000 Chairman.
But this is not the case!
There is only one Chairman and a few Directors because people in lower bands are promoted initially but later their promotion takes place slowly.
Why invest in yourself?
When you stop investing in yourself, after a
certain time, the turn-by-turn promotion stops coming.
You can get compounding growth only by ‘out-of-turn
promotion’ in which the salary packages increase with a very high percentage.
In such a case, an increase in inflation will not affect your growth.
How to get out-of-turn
promotion?
You can get the out-of-turn promotion by investing in
your brains.
All the millionaires have not become a millionaire by investing in the market but by investing in their business and their brains.
Whether you are an employee or an employer, there is only one way to grow - invest in learning, investing in your brains.
Some examples of millionaires who invest in learning:
| Successful People | Reading Habits |
| Bill Gates | Reads 500 pages book in a day and 50 books in a year |
| Oprah Winfrey | Reads one book in a month |
| Mark Zuckerberg | Reads a book in every two weeks |
| Warren Buffett and Elon Musk | They say that they are successful only because of reading book |
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