 |
 |
|
|
personal investmentsInvesting is themethod of accumulating finances or assets in hope of getting higher returns.Sooner the investment betters the yields. Personal investments start withfinancial planning or wealth management. Financial planning is defined as theprocess where by one sets long term and short term financial goals. He can dothe same by tax planning, retirement planning, goal planning and assetplanning. Financial planning is done to provide us financial freedom. Financialplanning turns our goals to reality.
Before starting for investment make sure how much money youneed and when you need it. Is your wish yours daughters marriage or yourchildren education or your retirement or just a monthly study income.
Investment should yield a rate of interest more than rate ofinflation. Investment should result in money growth. The three rules ofinvestment are invest early, invest for long term and invest regularly. Beforeinvesting you should have capital free from all obligations. Investment startswith savings. Little saving today adds to large sum in few years. Beforeinvesting make sure to clear all your loans and high debts. Clear all thebacklog payments like credit card, car loan etc.
There are manyinvestment options. Some of them include stocks, mutual funds, bonds, property,fixed deposits and gold. If you have the capacity of taking high risk thanshares is the best investment. If you can take moderate risks than Mutual fundsis the best option and if you are notready to take any risk than you can invest in gold, bonds or assets.
Investment in Securities: Investment in securities is afungible investment. It can be via investing in equity or debt securities.Securities can be purchased in form of certificate or electronic entity.
Investment in shares: Investment in shares is the most riskyform of investment. You can purchase stocks from the stock market. Differentcompanies issue there stock in the market to collect money. These companiesdistribute there profit in form of capital appreciation where by the value ofshare increases and by announcing dividends Before investing in shares alwaysremember few things:
It is arisky market.
Money isinvolved in buying and selling of shares.
Get fulltax knowledge before investing.
Company mayor may not announce dividend. It is completely the company's discretion.
Read thedocuments properly before buying shares.
Just don'tbuy any IPO for the sake of buying.
Investment in Mutual Funds: Mutual fund is a company thatcollects and pools the finances of many investors and further invests them indifferent securities. Each investor has a pro rata share in securities. Investing in mutual fund is very beneficialas funds are managed professionally. They are low cost as compared to otherinvestments. One can invest in mutual funds as per his convenience. Theliquidity of funds is very easy. Moreover tracking of mutual fund is very easyas this industry is very transparent. Different types of mutual funds have riskand reward system. Mutual funds with higher risk usually offer higher rewards.
Mutual funds can be classified on the basis of schemes, onthe basis of objective, on the basis of geographical location, on the basis ofstocks and on the basis of sectors.
Investment in Gold and Precious stones: Investment in Goldand precious stones like diamond, sapphire is a very old way of investing. Itis a liquid asset. It can be purchased from any place and can be sold anywhere.Gold can be purchased in form of jewelry or coins and bricks. If you arepurchasing gold only for investment than best way is to buy in form of coins.As resales of jewelry results in lose of 10-20 % gold. Similarly stones can bepurchased as jewellery or loose. Gold can also be purchased in form of a goldexchange-traded fund, or certificate. Buying gold in form of a fund and goldcertificate saves from the problem of storing and taking care later.
Investment in bonds: Investment in bond is like investing indebt securities. Purchasing of bond means giving a loan to a government,corporation, municipality, federal agency. In return you get a fixed rate ofinterest which is usually more than fixed deposits and saving accounts. Some ofthe bonds in US are U.S.country-region>government securities, foreign government bonds, municipal bonds or corporatebonds.
Investment in Fixed Deposits: Fixed deposits can be donewith various banks. They offer compound interests. Rate of interest is usuallysame by all the banks. Rate depends on period of investment. Rate of interestfor two years will be more than one year.
Investment in Real Estate or property: According to today's scenario it is the most promising market. But it requires large investment atone go.
Points to be remembered before investing:
Define yourobjectives.
Get all theinformation regarding the product you are investing in
Asses yourrisk taking capacity
If requireddon't hesitate in taking advice from financial planner.
Buying andselling of bonds, shares and mutual fund includes some cost.
Get fulltax knowledge before investing
If till date you have not thought of investment than do itnow. There's always a first time for everything. You can start investingyourself or can take a help of professional, who can help you in regulatingyour expenses and investment. He can also give the correct advice regardingyour investment needs. The best way to find a financial professional is bypersonal recommendation. Some other ways include advice from various financehouses and banks. Last but not least in search on internet
Other Articles
|
