Just saving money is not enough; you need to invest it wisely to ensure that inflation does not eat it away.

According to the dictionary, income that is not spent is saving. For instance, if you do not spend 10% of your monthly income and just keep the cash in a box, then you are saving money. It is a simple concept, but by itself, it does not get you very far.

The basic reason for that is that money does not retain its value. Meaning, what was worth a hundred rupees last year is probably worth ten or twenty rupees more this year. This rise in prices is called Inflation which eats away at your savings, bit by bit. Historically, inflation in India has always been at a far higher level than in developed countries. Over the last thirty years, it has varied over a wide range, but has rarely fallen below 4% per year for a sustained period.