When it comes to creating wealth the best way is to invest in some of the other investment instrument. However, contrary to popular beliefs, Investment doesn’t require you to park a huge amount of money in investment tools. You can start by investing as little as Rs. 1000 each month if you have the required knowledge about the investment vehicles. And thus the question is how to do it easily? Here is the answer:
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If you have lost the art of saving and are trying out ways to save money then stop trying too hard. Try the cookie jar approach that we used during our childhood days. In order to start investing, you have to first save some money. This can be some in a few simple steps.
You can start saving by putting away just a little amount each week. You can increase the amount over the course and adjust the tenure as well. Try putting the money in an envelope or a shoebox or a savings bank account. Get yourself into the habit of saving money and once you are able to save a good amount think of your next move.
If you are worried about how to go about investing with little money then high-interest savings account can be your choice. A bank savings account will help you park your money for emergencies as well as allow you to earn decent returns on your deposits. Some online savings accounts nowadays, provide high interest that ranges from 6-7% and requires no minimum deposit.
This can be called an electronic equivalent of a cookie jar approach. The money can be withdrawn anytime you need, and thus it manifolds as your emergency account as well as a savings account. When you have saved a large amount, you may proceed by investing it in some other investment vehicle.
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Mutual funds are an investment avenue using which you can invest in a portfolio of stocks and bonds as per your budget. Mutual fund portfolios pool money from investors and thus make the stocks of companies accessible to investors.
While many mutual fund companies require an initial minimum investment, many offer investments through the SIP route. Here the investors are required to invest a specific amount at a periodic interval and invest in a mutual fund portfolio as per their budget. Before investing in mutual funds, you need to access your investment goals, your risk-bearing capacity and the investment tenure.
For low-risk investments, you must go for debt mutual funds that offer capital safety with returns at a much lower risk. You may also try investing in hybrid funds for better returns on investments.
The debt market in India comprises of both government bonds and bonds issued by private companies. Debt securities issued by both private companies and the government contains high credit ratings and are lesser riskier investment options than equities.
But if you are a beginner and want to secure your investments from any type of risk, then you must opt to invest in government bonds. The government bonds are one of the safest investment options when compared to Private sector bonds. Since G-secs are issued by the government there are no chances of default on such securities and thus the investors will be saved from credit risk.
So if you are looking for short-term investments at lower capital risk then government bonds are one of the best options for you.
Retirement planning is one of the most important parts of financial planning. One of the best ways to start investing is planning for retirement. If you are a government employee or a private sector professional then it is mandatory for you to contribute to your EPF account. However, you may also subscribe to a PPF account for additional savings. You can start with a minimum contribution of Rs. 500 each month. It belongs to the exempt-exempt-exempt category which also helps you to avail great tax benefits.
A retirement plan focuses on summing up a large corpus so that the retiree can live his post-retirement life with complete financial independence without compromising on his lifestyle. Planning for your retirement early will allow you to accumulate a good corpus with little money. It will allow you to identify your priorities and maximize your investment potential and get adequate returns.
If you have little money to spare on investments then crowdfunding websites provide you with an avenue to make good returns. In India, crowdfunding websites allow you to invest in start-ups or businesses and the concept is similar to mutual funds investments, where a dedicated website enables a large number of investors to invest money in a business. Therefore, if you want to make some exceptional returns with low investment by taking a little risk then crowdfunding is an added option other than equity investments.
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You may also dedicate a small amount of your savings towards long-term investment tools like ELSS, PPF schemes. Right investment products will help you grow your money and generate a good corpus in the long run even with a lower investment amount. You may try market-linked products either through direct equity investment or mutual fund route to fulfil your long-term investment goals.
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