It must be noted that we roughly remain dependent upon our parents during the first quarter of our life and almost become inactive in the last quarter after we retire from active life. So we are left with the middle half of our life to earn to make our living as well as save the money for our retirement days.

Does it mean that we should set some money aside in our lockers or in our saving bank accounts so we can take it out to spend it when we are old?

The answer is no. For one, the total amount of our savings will start depleting the moment we start pulling out a part of it for our day to day living.

Again, by the time we retire, the purchasing power of the money may deplete substantially due to the inevitable and continuous process of inflation. Inflation or depreciation in the purchasing power of money is a harsh economic reality that cannot be avoided. It is a historical fact. It is as true that we all become old and our biological powers deteriorate with the passage of time.

Inflation means that while one dollar may buy you one liter of milk in the present times, it may just buy half a liter after you retire. Alternately, you may require two dollars to meet your requirement of one liter of milk.

How do you face this situation especially when you are old and cannot earn?

This is where the financial planning comes in. Financial planning helps you to manage your savings in such a way that you continue getting sufficient supply of money throughout your life especially when you are too old to earn. This can be done only by investing your money so that that it continues to grow and multiply and nullify the effects of inflation.

So, the earlier you start planning in your life for your future, the better. The truth is that you should start your financial planning for your future as soon as you start earning money.

This can be done by saving certain amount of your earnings for investment in such avenues which yield the maximum returns. There are numerous investment options and each one appears more alluring than the other.

But you must go for the investment option that suits your personal financial circumstances.

Some of the popular investment options are putting your money in fixed deposit accounts, mutual funds or stocks and shares also called equities.

While deciding upon any option, you must aim at getting maximum returns on your investment with minimum risks of losses.

The first option is to invest your savings in fixed securities because they offer assured returns without any risks. But since there are absolutely no risks in fixed deposits, therefore, the returns too are not really high enough to meet the contingencies of inflation in the distant future.

The second option is mutual funds. The mutual fund managers invest your money according to their discretion and charge you high fund management fees without guaranteeing you any specific returns. They warn you even before you invest with them that your investment is always at risk. Most of your funds are invested in risky equities and above all you do not have any control over the avenues of investment.

Investment in stocks and shares or equities brings in the maximum returns. But you may be warned of the attendant risks of losses as well.

It is heartening to learn that you can derive the benefit of earning the highest returns from investment in equities without facing the attendant risks.

For this you first need to open an account with a brokerage firm. It takes only a few minutes to open an account. Your broker will offer you numerous investment options in equities such ETFs, DRIPS, fractional investment plans, scheduled investment plans, various retirement plans with tax saving options and much more which yield assured higher returns over a period of time. The whole process of investment and making profits is made automatic and hassle free. You only need to study the website of your broker and contact their customer services in case you have any doubts.