Why investment planning is necessary?

1. To achieve financial goals: Investment planning helps individuals to identify their financial goals, such as retirement, buying a house, or saving for a child’s education, and create a plan to achieve those goals. By investing their money wisely, individuals can grow their wealth and achieve their goals faster.
2. To beat inflation: Inflation erodes the purchasing power of money over time, which means that the same amount of money will buy less in the future. By investing in assets that have the potential to generate higher returns than the rate of inflation, individuals can maintain their purchasing power and protect their wealth over the long term.
3. To diversify risk: Investing in a variety of asset classes, such as stocks, bonds, and real estate, can help individuals to spread their risk and reduce the impact of market volatility on their overall portfolio. Diversification can help to minimize losses in a down market and increase returns in an up market.
4. To generate passive income: Many investment options, such as stocks, bonds, and rental properties, can generate passive income in the form of dividends, interest, or rental income. This can provide individuals with a source of income that can help to supplement their salary or retirement income.

In summary, investment planning is important because it helps individuals to achieve their financial goals, protect their wealth against inflation, diversify their risk, and generate passive income.