WHY NOT FDs ?

WHY NOT FDS ? THIS IS THE EXACT QUESTION MY FRIEND ASKED ME WHEN I SUGGESTED HIM TO INVEST IN SHARES.
NOT JUST MY FRIEND , BUT ALMOST EVERYONE THINKS THAT HAVING FDs (FIXED DEPOSITS) IN BANKS IS THE BEST INVESTMENT FOR THEM. WHEN I SUGGESTED HIM TO INVEST IN SHARES HE WAS QUICK TO POINT OUT HOW RISKY THEY ARE AND HOW SAFE FDs ARE.

I HAVE ALREADY EXPLAINED HOW PROFITABLE SHARES CAN BE WITHOUT ANY MAJOR RISKS , AND SO THE POINT TO PROVE TODAY IS "HOW SHARES ARE BETTER THAN FDs"
AN EXAMPLE TO MAKE THINGS EASIER AS USUAL
1.CONSIDER THAT YOU ARE BLOWING A BALLOON NAMED 'SAVINGS' .

2.YOU ARE FILLING IT UP WITH AIR i:e YOUR HARD OWNED MONEY OR WE CALL IT 'INVESTMENT' .

3.NOW THE MORE YOU INVEST THE FATTER YOUR SAVINGS ARE GOING TO BE.

4.BUT THERES A MAJOR HITCH. EVEN IF YOU KEEP A BLOWN BALLOON SEALED TIGHT ( A PERFECT ANALOGY TO FDs) IT LOOSES AIR PERIODICALLY THROUGH SMALL PORES.
IN OUR CONTEXT THE PORES WHICH CAUSE THE LOSS ARE CALLED 'INFLATION'
SO IN OUR CASE EVEN IF YOU KEEP ON INVESTING IN FDs , INFLATION IS NOT GOING TO LET YOU GO FURTHER.

TAKE THE PRESENT SCENARIO. BANKS ARE OFFERING UPTO 10% ( MAX) PER ANNUM ON FDs OF 1 TO 3 YEARS, WHILE THE INFLATION IS HOVERING AROUND 5% MARK.
LETS SAY YOU INVEST Rs 100/- FOR A YEAR . AT THE YEAR END YOU WILL GET BACK Rs 110/-. BUT THE INFLATION IS ITSELF 5%, SO THE TRUE VALUE COMES OUT BE ONLY Rs 105/-,THUS YOUR NET PROFIT IS JUST 5% .
THUS TODAYS Rs 100/- ARE GOING TO BE WORTH ONLY Rs 95/- IN THE NEXT YEAR,OR IN OTHER WORDS FOR SOMETHING WORTH Rs 100/- THIS YEAR ,NEXT YEAR YOU WILL NEED TO SHELL OUT Rs 105/-.

AS AGAINST ALL THIS, SHARES OFFER YOU 15 -18% INTEREST PER ANNUM,AND THERES NO NEED TO EXPLAIN THAT YOU WILL END UP EARNING MORE.TO ADD TO IT YOU HAVE GREAT LIQUIDITY,WHICH HELPS YOU WITHDRAW OR REINVEST AS AND WHEN YOU NEED.