What is investing? - Key takeaways - Why Invest? - Investing tips for beginners - CTA

You have come to the right place if you know nothing about investing. We hear a lot about investments in the news and on social media channels. What is it about them that attracts so much attention? Read on to learn the basics of investing and how to save, invest, and profit from it.


What is Investing?

Investing, in general, means making more money with money. In financial terms, investing is purchasing assets to produce income (interest) or grow them over time and selling them for a profit (capital gain).It moves you closer to achieving financial independence and fulfilling long-term goals, including buying a home, sending children to college, planning a marriage, or living peacefully in retirement. It is critical to note that different investments carry varying degrees of risk.






Key Takeaways:

1. The significance of saving and investing for a better future.

2. It is simple to begin investing. All you need is money, a plan, and persistence.

3. Before making any investment, the inflation rate must be taken into account.

4. Prepare to take risks and maintain a diverse investing portfolio.


Why Should I Invest?

The answer is simple. To make more money. By investing money, you not only reduce your spending on unnecessary items, but you also give your money the opportunity to grow and multiply manifolds





There are many reasons why people invest. Here are a few of them:


1. Financial Stability:

               People want to be financially stable, so they need extra money. This extra money will help them with the confidence to protect themselves financially against any financial crisis that can hit them. An example of such an event could be a terminal medical condition that needs a lump sum of money to get treated right away. We cannot postpone such expenses, and these unforeseen occurrences frequently leave us with a large number of debts. Then people spend the rest of their life working to repay their loans. In order to overcome such financial problems, it is essential that you invest.



2. Financial Freedom:

               The investment enables you to be financially independent and boosts your purchasing power, allowing you to avoid relying on others for money for the rest of your life. Remember when you relied on your parents for pocket money during college, and you often felt it was insufficient, and you knew you were not going to get anything more after a dozen reasons from your side as to why it was important? Not anymore. Financial freedom makes you feel less of a burden and more like a king or queen. If it is possible to achieve through investment, why not give it a try?


3. Build your Wealth:

                Building wealth begins with earning enough to cover all of your needs and setting aside a portion of your income for savings. These savings will help you start investing in various instruments and earn returns in the form of dividends, Interests or Capital gain. This means you can save from the income generated from a range of investments and then reinvest it to build your wealth gradually over some time


4. Attain your goals:

                 The best way to plan investing is to list all your financial goals. Figure out your goals to invest according to the time and money required to achieve the particular goals. Your goals can be anything from buying a house, investing in your child’s education, planning on a world trip or simply enjoying a relaxing retirement life. When you choose investments that are tailored to your financial goals, you save more and avoid unnecessary expenses, allowing you to invest more.


5. Inflation:

                 Inflation results in increasing prices and lowering the purchasing power of people. If chocolate costs Rs. 10 and there is 20% inflation, that means it will cost 20% more the following year (i.e., 10 + 2 = Rs. 12). This means you cannot buy as many chocolates as you want if your income is not increasing in accordance with the inflation rate. If you want your money to grow on its own, inflation is a major obstacle. Your savings will be drained if they are left idle. To avoid this, you must have a well-planned investment strategy that takes inflation into account.


Investing tips for Beginners:

Ding! Ding! Time for some pro tips. With our understanding of what is investing and why we should invest in the first place, let us enjoy some investing tips for beginners, shall we?


Start Early, Start Now:

The Calves dare where the cows scare’. When you are young your risktaking ability is high because you have fewer financial responsibilities. This helps you to recover more quickly from your mistakes and allows you to invest before thinking twice about a risky investment You can start investing small if you start earlier because you have so much time. In our first jobs, the income may not be that high so, we end up spending most of our money on basic needs such as food, rent, clothing etc. Saving a portion of your income right from the start builds a good spending habit that prevents you from wasting your money.





Buy the Right Investment:  You have so many kinds of investments with different time duration. The term ‘right investment’ is that investment suits you the most and caters to your needs. So it is necessary to find your financial needs to meet its perfect match to get good returns.


Reinvest for a better retirement: A plant watered daily grows towards the Sun. Similarly, your income from investments can be continually reinvested so that your principal amount increases gradually over time yielding you amazing returns. In simple terms, if you are going to start investing, plan for the long term to enjoy its fruition on your retirement.


Diversify your investment portfolio: You may be familiar with the saying, ‘Don’t put all your eggs in a basket’, and it only means to divide and conquer. Put your income into a variety of investment products. If one of your investments falls short, you could always offset the loss with the earnings generated from the other investments.


Bottom line: Remember that investing is about growing your wealth and generating income. You must do it cautiously with a thorough study of investments. At GHL, we do that research for you and make your investments more secure by providing you with a bank guarantee.


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