4 Best Investment Tips
Tags: Investment Tips, Money Management, Personal Finance, Financial Planning, Investment

In this fast-paced world, we are running to perform two different actions, one is earning and another one is spending. We never think about the vital process for money accumulation which is called investment. When it comes to a job, you work for money. But whereas in investment it is contrary, the money will work for you. It is the place where all the compounding and recurring of money will take place.

It is always advisable to invest half of your earnings as an investment (whatever the investment it can be). This will yield you a good amount as a return in the future when you really need it. Before we get into the investment tips, if you have never been to this investment area, this will be Greek and Latin to you.

For those people, let us have a quick sum-up of what investment is and its types. And for others, this will be a jog for your memory.

What is Investment?

Investment is an act of investing your money into an asset of a certain value. The value of a certain asset will be increased over a period of time. The investment aims to appreciate the value of an asset by yielding an enormous amount of money.

Every investment is assessed based on the time (tenure), money(invested amount), return(rate of interest). Most people do investments to create or multiply their wealth which will be used in the future.

Let us see about its types…

Investment

Types of Investment

Investments are available in different types. I would like to mention some of the common investments that are done everywhere.

Gold and Sovereign bonds Share Market and Mutual funds Cash Certificates Commodities Fixed Deposit(FD) Recurring Deposit(RD) Real estate Cryptocurrency Market

You can choose your right investment based on your investment money and risk appetite. When we talk about risk appetite, every investment has different risks. Understand the types of investments that are with different risk levels before investing. It will surely help you out in choosing the best investment for you. Now let us proceed with the tips that will help you with investing.

Investment Tips

Before stepping into investing, I would like to brief you with some tips that will surely help you in handling your investment in a hassle-free way. These tips are not subject to handling one particular investment; these will apply to all the investments out there. Okay, let us quickly move to tip one…

#1 Have a thorough knowledge

You must have thorough knowledge about the investment that you are about to invest in. You must look for the interest rates from different investments and compare that with another investment or different investment firm.

Let us have an example: if you are investing an amount of 1000 as a fixed deposit (you can assume whatever investments you like). You are approaching a firm called ABC, they offer you 5.68% for 1 year. You should not stop with that. You must look for other investment firms and also about their interest rates. When you constantly enquire in different firms about the same investment, you will get to know different variations. Let us keep another example: In another firm called XYZ offer 7% for 1 year for the same investment, which one will you choose to go?. When you constantly search for other options, you may get to know with new plans.

You can do this approach for all the investments, this will widen up your view and you will come up with so many options in hand.

#2 Plan Before Invest

I always advise you to plan your finances. You must have a thorough understanding of how money flows in your home. It doesn’t matter how much you earn, financial planning is the most important thing that you should do. You should manage and calculate all your transactions every week. By doing that you can figure out the ways where your money is getting spent lavishly.

It is always important how much you are about to invest. There is a famous rule called 50–30–20. Where 50% of your money can be spent on your needs. 30% of your money can be spent on recreation which will be your wants whereas, your 20% of earnings must be saved or invested.

#3 Never rely on one

There is a popular quote on this attitude, it goes this way “Don’t put all eggs in one basket”. With that, investing all your money in one investment will put you in a high-risk zone. The reason is, I will explain to you with a small example.

If you are investing your money of 1000 in a share. You have bought some shares for the whole investment amount. You thought the share will give a good amount despite some little price falls.

Unfortunately, if the share faces a huge fall that you haven’t imagined, the whole invested amount will be at loss. This is the prime reason that you should not invest your whole amount in one investment.

#4 Never be Greedy

Never go for an investment that has a high-risk appetite that will attract you with a high-interest return. But, that will lead you to a heavy loss. If you get a good amount of profit, with a meager amount as an investment.

That doesn’t mean you must invest more. It is more like a temptation that it creates. Never invest more than what you are capable of. That will lead you to a heavy loss that you have imagined.

These are all then organic tips for carrying your investments in the right direction. I have jotted all these out of my personal experience. Hope these tips will help you to gain more profit without any losses. For more such amazing articles never forget to follow.