Investments: What to expect and responsibilitiesWealth Prime
We all hear about making wise investments quite often. But what exactly does it mean by wise investments and low risk or risk-free investments? As one of the famous investment bankers mentioned once that, “An Investment is just like learning to drive a car. One does not know what it is like until you step and do it”. However, this does not mean that one should not prepare or get into it right away; it is rather not like just taking the wheel without knowing and learning the important lessons first.
So, it is never advised to invest your hard-earned money without learning the basics. In this article, we will tell you a few things on what to expect when you begin to invest and what should be your responsibilities once you start doing them.
What do I expect from making investments?
Let’s keep it simple. Once you start working, you start getting paid and then you are supposed to pay a certain amount of your income as tax to the government. Also, you have your expenditure and monthly savings. Now, investments are nothing more than just a way to save your income wisely, that is, through getting good returns on your savings. These returns on investments, since they keep altering in every form and every month, makes you take some decisions to invest in safer options. Once you decide to invest your income in places like mutual funds, you can grow the money with the power of compound interest to support your financial plans.
You can similarly, make tax-saving investments where you can save a certain amount of tax you pay to the government. In India, one can save tax as per section 80C in various forms. Some of the equipment to save tax includes National Savings Certificate, EPF, tax saving mutual funds, FDs and so on. These are also the different investment options for you with different rate of returns.
Through investments only, you’ll have to check that what will be the rate of return to your investments in the known period. Also, one has to see what a particular form of investment can bring to you and how much money it can multiply.
What to expect from yourself: Your responsibilities as an investor
While you invest, remember, you will either be posing an obstacle or an opportunity. You have to decide what it’ll be. Your investment behavior, ability to control and ability to make decisions will be the tools to help you make the best decision and live a financially secured life. Here are a few responsibilities for you to follow as an investor.
Invest around 15% of your income in various forms for retirement. Never put all your money in just one form. In case you can invest more than the specified percentage of your income, you can always diversify your investments in a better way. Start with risk-free and protected funds to invest and then you can begin to diversify into high return forms. Hence begin with safe options like fixed deposits, post office savings, and national savings certificate at first, and you can go on to mutual funds and shares with low risk or medium risk afterward.
Further, make sure to have consistency in your investments. It is not like you get into one and stop over there. Let it be any form, or any stage of the economy, be it boom or dust, keep on investing consistently during both. You will only learn when you’ll keep on investing. As you go on, you will also learn what investment is best suited for you and what risks you do not want to take in the future again. Never underestimate the professional investment advice in this matter.
You can achieve good results and also get the market-oriented views from a professional only. They will help you to analyze your income, retirement age, lifestyle and your long-term financial goals and will get you a better option, one that will be tailor-made for you, suitable for all your needs. They will help you get to the right answers for the questions about your own decisions. The key, however, is to find an excellent professional.
Last but not least, never focus on the short-term investments, instead keep your focus on the long run. You can quickly get disappointed by the performance of short-term investments as it is inevitable that the market never shows the returns quickly in a short time. A diversified approach is better as you can then maximize the performance and reduce the risks with different strategies. Hence do not get caught up with short term periods which can forfeit you from getting long term gains.
We hope, you now have an idea for getting started in the world of investments. Remember, always begin with baby steps and never turn back without investing regularly.