Have a great job with a decent pay but been putting off investing? If you just answered yes, then this article is for you. Investing even small amounts and making a habit of it is just as important as finding a great job. Read on to find out how to get started with investments so that you are in a financially strong position down the road.
Ascertain your investment goals
Sure, you want to invest to earn money but everybody’s needs are different. Is it for retirement? Are you saving up to buy your dream home? Whatever be the goal, remember to take into account your age, income, capital security and appreciation.
Set aside money at the start of every month
Set aside some money every month as soon as your salary is credited into your account. Calculate the amount of money you actually need to sustain, e.g. your rent, food expenses, utility, etc, deduct that from your salary and put 5-10% of the remaining amount into an emergency fund of sorts. Make it a point to leave this fund untouched so that you have enough resources to tap into when you are in dire need of money be it a family, health or business emergency.
Set up a recurring deposit
This is a great option to start saving money and earning interest on them. You can deposit small fixed amounts in your recurring deposit as and when you have money. The rates of interest are generally the same as that of a fixed deposit. Nowadays, flexible recurring deposits too have come into the picture and these are a great investment option for anybody who has just started earning or is new to investment. The amount you invest monthly is not fixed and you can deposit small amounts of money through the month for the tenure you decide upon when you open the RD. Opening an RD is also beneficial for anybody looking to invest and save money towards a goal such as buying a bike, car or for a holiday.
Invest in Public Provident Fund (PPF)
This one is a no-brainer for investment newbies at an interest rate of 8.0%. Most companies automatically deduct an amount towards PPF from your salary before the salary is credited into your account. If it isn’t automatically deducted, consider getting yourself a PPF account. Not only is it secure as it is owned by the government, but the interest and maturity amount are also tax-free and helps save tax under section 80C.
Start a Fixed Deposit
Fixed deposits (FD’s) are a good investment instrument for those who are just starting out and do not want to take major risks. Once you accrue enough funds from your RD, you could invest it in an FD for a period of your choosing. While the interest rates have dipped due to the demonetisation, FD’s are still a good investment option as your capital is safe and due to the ease of its availability and operation.
An old but golden rule. Always stay in the know about money matters because you don’t want to lose out or be the last to know. Take an interest in market trends and new investment instruments to keep yourself informed. You could subscribe (?) to our blog here to keep yourself updated about the latest from the world of investments.
Once you have an investment portfolio in place, you can move on to the more aggressive investment options as mentioned here 5 Ways To Invest Money Lying Idle In Your Savings Account. Though it is better to start investing early it is never too late to get started on it! Your future self will thank you for every penny you save and invest now.