A Beginners Guide to Basics of Investing

Well Done!! Give yourself a pat on the back……you deserve it!! If you have landed on this page, it means you are already a step closer to taking some of life-changing decisions.

A Walk-Through the Basics of Investing

Just to give a small insight on what is investing and how is it different from savings. Investing is putting all your excess money into different financial instruments such as bonds, equities, property & schemes, to maximize your returns. Often people just put their money into a bank, considering it to be the safest and best investment. But when you end up calculating your saving, you realize you lost more than you actually saved, since the interest rate offered by a bank is lower than the inflation rate of our country.

So, let's take the high road to multiplying your money through investments.

  1. Create an emergency fund- one must always have a liquid emergency fund of typically for 6months of your expenses. This will be your go-to fund for cases like medical emergencies, accidents, or job loss. To build this fund, you must invest a small part of your monthly salary till you reach the required amount.

Types of Investments:

  1. Physical Assets: Assets that can be touched and felt. Eg: Gold and property. Property mainly consists of land or real estate. These assets are not only difficult to invest in as they require lumpsum amounts, but also to maintain and sell as their prices are dependent on the demand and supply equation of the market and thus the prices may vary a lot. Gold is considered to be the safest investments assets since historic times. Indians have always believed in investing in gold, and now with the advent of Gold ETF, you can also buy gold stocks, just like any other stocks.

The best investment decision includes diversification of investing instruments. One should not invest in one avenue alone, instead invest in multiple instruments according to the investment goal and individual risk.
Diversifying the investment portfolio, reduces the risk multifold, since the downside of one asset will be balanced out by the upsides of other instruments in your portfolio.

Gone are the days when you would have to do all the research yourself in order to find an investment strategy best suited for you. With the market full of personal finance apps, you have a financial advisor right in your pocket. These apps take in your risk appetite, your investment goal, tenure of investment and then recommend you the best schemes accordingly. Post this all you need is to invest and relax, while you see your seeds growing to be a tree in the future.

SplitEase helps you automate this. You can sign-up for early access. https://splitease.com

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