Complete information about investment: why, when and how

Investment does not only increase money, it also improves the quality of your life, as you move towards financial freedom. Keep in mind that your first investment is never big, but its impact is definitely big in the coming time.

Investing is not just a way to increase money, but it is a thought, a habit... which makes your tomorrow secure. But choosing the right path in this journey is very important. By following the right path of investment, you not only increase your money, but also make your dreams come true... Let's know some important things...

Things You Will Need

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Method

Keep both investment and insurance separate

Insurance is for security, not investment. Do not ignore small investments. The beginning can be small, the habit should be big. Keep an exit plan with every investment. When and how the investments will be withdrawn should be decided in advance. Even when the returns are good, withdraw smartly and also when needed. Keep updating the information about investments. New options keep coming with time. Keep upgrading your knowledge and strategy.

Set a goal and start early

The sooner you start investing, the more you will benefit from compounding. Investing without a goal is like a journey without a map. What do you want to achieve from investing? Buying a house? Children's education? Retirement? Choose different investment options according to each goal (like short term FD, long term SIP/stocks)

Keep a record of expenses

Savings will increase only when expenses are controlled. Make a budget and cut down unnecessary expenses. Keep in mind that investing is a habit. It is a lifestyle. Investing is a mindset, which gradually creates wealth. Therefore, it is very important for you to be disciplined.

Focus on savings

Focus on savings. Then invest in options with good returns. When you get good returns from an investment, do not wait any longer out of greed. Book profit and invest that fund again at the right place. Always look at the real return, return-inflation. Just looking at the nominal return can be misleading, because if the return is 7%, but inflation is 6.5%, then the actual benefit is very less.

5 fundamentals of smart investment

• 1. Start early (Power of compounding)
• 2. Invest regularly (plans like SIP)
• 3. Keep diversification
• 4. Choose according to your risk profile
• 5. Think long term.

Along with this, keep learning continuously, the world of investment keeps changing. 'Correct information is the biggest investment.'

Create an emergency fund first, invest later

Investment without security is risky. First of all, keep aside an amount equal to 6 months' income (in FD or savings account). So that in case of sudden expenses (like medical, job loss), the investment does not break. There is no problem.

Review, be cautious

First make necessary investments, then think of taking a loan. Choose tax-friendly investments. Set auto-deduct investments. Do not forget to review regularly. Do not leave the investment, keep managing it. Portfolio review should be done every 6-12 months. Remove poor performing funds, choose better options. Eliminate high-interest loans (such as credit cards, personal loans) before investing.

Note: Do not hesitate to take financial advice. With professional guidance, you can make better decisions. You can avoid losses.

Some common questions and answers...

Q How much should I invest?

A Invest according to your savings and expenses.

Q Don't understand much about investing?

A. Invest only after getting information and with the advice of experts.

Q Is the stock market risky?

A Yes, but the risk can be reduced with the right strategy and patience.

Q Can you start with a small investment?

A. Absolutely, it is better to start with a small investment.

What is your age...

Investment strategy should be kept according to age. Different investment plans need to be made for goals like home, marriage, education, retirement. This prevents the need to take a loan suddenly and also many other problems. 20-30 age group: Can take risk? Shares, SIP, ELSS 40-50 age group: Maintain a balance. Mix of SIP, FD, Gold 60+ years: Focus on capital protection. PPF, Senior Citizen Schemes etc.

Investments, expectations and disclosure in the report

The near future employees working in the private sector are not saving anything for retirement. Their investment is also only 1 to 10 percent of the total salary. According to the survey report of Grant Thornton India, there is a huge difference between the desire of people to get monthly pension after retirement and the efforts being made for it. According to the report, 55 percent of the country's employees want to get a monthly pension of more than Rs 1 lakh after retirement. However, only 11 percent believe that their current investments are sufficient to fulfill these expectations.

Inflation Hedging

This is an investment strategy aimed at protecting against losses due to inflation. This can include property, gold or other assets. Asset allocation is also fine. You divide your capital into different types of assets (such as shares, real estate) so that the risk is reduced.