Financial security is indeed one of the most important factors in today’s world, and simply earning enough won’t get you through your entire life. You will have to plan for the future and ensure that you make smart investments that will actually make your money grow. If you are yet to make your first investment and start looking into options available, it can be pretty confusing and overwhelming. There are plenty of investment options available and each one has its pros and cons. So, here’s a guide to best way to invest and make it count.
Basic Rule Of Investing
You need to remember the most basic rule while looking for the best way to invest money. Investments are for long term and there is no “getting rich overnight” kind of scheme, however much you might be convinced by such movie scripts. What works for others might not work for you, and so, you need to find your own plan.
While investing, never put all your eggs in one basket. As you must have heard this from Warren Buffet and many other investment masterminds, when you are taking risks, make sure your risks are evenly distributed. If you are testing the market, don’t jump into it with both feet. Always expect the best while preparing for the worst.
Where Should You Invest?
Considering you are in your 20s and just starting to consider investment options, start with the no risk reliable options. Insurance schemes, retirement plans, and bank investments are the ones with zero risk while ensuring fixed return. This creates a strong base on which you can take further risks.
Medium risk medium return options
The thing about creating wealth is that you will have to take risks. You cannot avoid risk altogether and generate wealth through investment. However, the level of risk can vary, and so will the return. Medium risk options are mutual funds and SIPs. However, they are the best way to invest money. The idea is to accumulate fund from multiple investors and then use a carefully calculated investment pattern to ensure that there is return guaranteed under most circumstance. The return is mostly in the moderate segment, but, certainly more than what you will get with fixed return plans with the banks.
High risk high return options
The stock market is the place where you will find the most ruthless investors. It is also the place where maximum money is being made. Investing in stocks and bonds come with inherent risks and they are pretty high. However, the return is also quite high in the long run, making them some of the best investment options available to grow your wealth.
Creating Your Investment Portfolio
It is important to create your own investment portfolio. Never invest all your funds into one type of investment option. Spread it out and ensure that you have got sufficient financial support for your future needs. Investing in insurance schemes and retirement plans are important to ensure better future towards the end of your life. Bank investment options should be kept at a balanced level. Rest of your intended investment should go to the medium and high risk options. To ensure better return, always go for the long game. Keep in mind that there’s no such best way to invest money, unless you are making them “best”.