How and why to Invest – A beginners handbook for Investment

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Life is an opportunity to realize all your dreams you’d ever wished for. From buying your favorite car to sending your child to Ivy League College, there’s so much you’d want to turn into reality. Having money is what can bridge the gap between reality and the fulfillment of your goals.

But you doubt that with the current monthly salary and savings, you’d be able to make your dreams come true. That’s exactly why we suggest you should give a chance to the considerable money-making potential of investments.

Let’s guide you all a little more about it.

 

Why Should You Invest?

We all have goals which help us look forward to life. We all try and save a little – but this little is not sufficient to give us a cover for the rainy days or meet some specific expenses. However if we invest, it not only helps us garner profit but also help multiply. This way you can thus achieve all your life goals and dreams with relative ease.

When to Invest?

While there is no right age to start investing, but you should start early to reap maximum benefits. Investments are subject to compounding due to time factor involved. So, the earlier you begin, the better it is. If you remain disciplined by not withdrawing and give ample of time to your investments, you get to increase your wealth big time.

How to Invest?

To invest, you may keep the following in mind

  • Do your research well –Do your research to identify which one aligns with your goals the best before investing your money in any of the funds.
  • Start small – You can start small as a beginner. You can also start as small as Rs.500 with SIP available as an option.
  • Diversify your investment – Rather than putting all the instruments in one basket, try to put your money in different instruments to balance out the risk involved.
  • Consider tax saving investments – We have investment plans available in the market, which give us tax benefits. We can also choose to invest in them for additional benefits.

Where to Invest?

On the basis of how an instrument is acquired, it is broadly divided into two:

  • Direct Investment – One that you buy on your own directly from the government.

Stocks: These refer to the shares in ownership of any company. These earn you dividends in return.

Bonds: These refer to the money you lend to the government or an institution that gives you fixed interest at regular intervals and also returns face value in the end.

  • Indirect Investment – These are the instruments invested in various stocks and bonds on your behalf. Indirect funds offer better liquidity, diversification, and a greater sense of control to you.

Mutual Funds: This diversified investment offers you an array of options to invest in equity, debt, or a hybrid fund. Funds collected are invested in the company’s shares or bonds and are managed by the professional fund managers.

START EARLY. START NOW. REALIZE YOUR DREAMS.