We Everyone listens that it is not enough to earn and save only; It is very important to invest to keep the future safe. We often start investing by obeying this, but in the absence of correct information, we make mistakes. The result is that we start investing, but cannot start properly and miss our financial goals. It is very important to understand some things before investing. If you do not do so, you will not be able to start your investment journey properly. Let us know what special things should be taken by an investor before starting investment.
Why invest?
Investment is more than saving money only; This is a powerful way to make your future safe and prosperous.
- To beat inflation: The rate of inflation is usually 6-7% per year. If your money is only lying in the savings account, then its actual price decreases over time. By investing in the right medium, you can beat inflation and give your money a chance to grow.
- To fulfill dreams: Whether it is to buy a house, a children’s higher education or a comfortable life after retirement, investment helps you reach all these big goals.
- To put money to work: By investing, you can put your money at work for yourself, which keeps it growing over time and gives you the benefit of “compounding” (compound interest).
Major investment options
Nowadays there are many investment options. You can choose from these according to your need and risk ability:
Stock Market
In this, you become their partial owner by purchasing shares of companies.
Example: Shares of big companies like Reliance, Tata Motors, Infosys.
Risk: Stock market fluctuations occur, so it can be high-risk, but there is also a possibility of high returns.
Mutual Funds
Professional fund managers in mutual funds invest your money in various shares, bonds and other assets.
Example: Equity fund (high risk), date fund (low risk), hybrid fund (balanced risk).
Risk: Risk depends on the type of funds, but it provides diversification.
Gold
Gold is considered a traditional and safe investment option in India, especially in times of economic uncertainty.
Example: Gold ETF (electronic), gold coins, or jewelry.
Risk: Gold prices depend on international markets and geopolitical conditions.
Real Estate
You can get good returns in a long time by investing in property, as well as income from rent can also be received.
Risk: It usually requires large capital and low liquidity.
Fixed Deposit – FD
You can get safe and fixed returns by by FD in bank or post office.
Risk: It is low return, but the risk is also minimal, which makes it attractive to Conservative investors.
What should be understood before investment?
It is very important to know the answers to some basic questions before entering any investment:
- Decide the goal: First of all make it clear what purpose you are investing – is it to buy a house, for children’s education, for retirement, or any other goal? The target is clear that helps to choose the right investment option.
- Determine the deadline: How long do you have to reach your goal? If your goal is long (eg more than 5 years), equity-based investment (eg shares or equity mutual funds) may be better, as they can give high returns over time. FD or date funds are better for short time goals.
- Understand the ability to take risk: How much risk can you take? If you do not want to take a risk, choose fixed deposits or low -risk date funds. If you can take a little risk for more returns, invest in equity. Investing without understanding your risk capacity can be harmful.
- Diversification: “Do not keep all your eggs in a basket-this is an important rule of investment. Divide your investment into different options and assets, so that the risk is reduced. If one investment performs poorly, the other can balance it.
(Disclaimer: This article is written only for the purpose of information. Please consult your financial advisor before any type of investment or before taking financial risks. India TV will not be responsible for any kind of risk.)
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