Investing-Means to a better life.

“If you don’t find a way to make money while you sleep, you will work until you die”

-Warren Buffett

A large portion of our society today lives on a daily wage basis. People wake up in the morning, go to work, earn their daily living and might live their life the same way for the next 30 years!

To invest is to allocate money to businesses, startups, stock markets, bonds etc. with the expectation of a benefit or a return in the future. Now first things first.

Why to invest?

Money is an entity that should be placed to work rather than the human body itself, while a person may put their money in a bank or a savings account, he or she could earn a lot more with putting that money to work.

The average rate of interest earned from putting a person’s money in a savings account is 2-5% per annum. (In India)

At the same time the average return on mutual funds in India is 8-14% per annum.

Now note that even though mutual funds carry slightly higher risk than a savings account the return is almost double. So instead of a person’s money lying nearly dormant, it could be invested in order to secure a better life in the future.

To give you another perspective; if you bought something for 1000 Rs. In the year 2000, the same thing would cost around 1550 in the year 2020 due to inflation. If you invested the same amount in an investment account it would have resulted in around 3200 Rs. Maybe even more!

The basic concept of investing consists of two factors that the general public should be concerned with; the risk and the return.

In investing, risk and return are basically two sides of the same coin; low risk generally means low expected returns, while higher returns are usually accompanied by higher risk.

How do you start?

Before putting your hard earned money into an investment vehicle it is necessary to know about it. Keep in mind that the more you know the safer and more efficient investment decisions would you be able to take.

To start off you can go one of two ways. Either doing it yourself or hiring an advisor or a broker.

If you choose the first option we would strongly recommend educating yourself and starting out small! Trial and error is one the widely used techniques implemented in the stock market, you will have to pick an investment strategy according to the amount of risk you wish to bear and the return you are expecting.

However, if you choose to go with the second option there are numerous fields where you could start of investing your hard earned money. The financial experts handling your transactions and advising you on your decisions would take a small fee but can also prove to be a mentor for you to learn from!

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