Life can take you by surprise. One minute you're trying to sharpen your pencil without breaking it and the very next minute you're a grown-up. Everyone expects you to know adult things like what the best way to invest money is, how you can invest in stocks and what the best mutual funds are.
All these are crucial questions you need to answer to ensure you make your money work for you. The money you've worked bloody hard for and while it's not something you're proud of… you don't know how to Invest.
That's most of us… most people get thrown into the world of investing and it's quite overwhelming. Which is why we at Cube Wealth have put out this piece. But before we jump into the deep end, let's cover the basics.
Why Should You Invest Your Money?
Why invest your money? Why not just let it sit in your savings account? After all, you do get interest on your savings account. Moreover, it's guaranteed returns! Why then do people suggest you invest your money? Well, the answer is simple - inflation. Most savings bank accounts will barely keep up with inflation. So, you are at best going to maintain the value of your money.
Investing, on the other hand, offers you a chance to beat inflation and grow your wealth. Whether it's through, property, Gold, bank fixed deposits or stocks, bonds and mutual funds. You can make your money work for you if you play it smart.
How To Start Investing?
Starting investing can, like anything new, seem a little daunting. You're not sure about your decisions and are constantly second-guessing yourself. The key is to start small and start smart.
You don't need a lot of money to start investing. A simple Systematic Investment Plan will allow you to invest in Mutual Funds with as little as Rs.500/ Month. What you need however is a guide - a wealth coach or advisor who can help you make the right decisions. If you want help on this front you can download the cube wealth app and get started for free.
Where To Invest Money?
If you're a new investor then it's best to invest some tried and tested forms of investment. These include:
1. Investing in a property (real estate)
Real estate is a popular investment option because of its tangible and usable nature. However, you can not consider real estate an investment unless the profits from rental or sale have been realized. So from the liquidity point of view, it isn't the best bet.
2. Investing in stocks and bonds
Stock and bonds are great investment options for those who are willing to take a bigger risk. It also requires more knowledge and tracking than some other investment options. Which is why for most people Mutual Funds are safer and more reliable investment options.
3. Investing in mutual funds
Since a mutual fund is a combination of stocks, bonds and securities it is lower risk than direct stock investments. When done through SIPs and managed wisely it gives you the benefit of the rising markets without putting your money at too much risk. To know more you can read our blog about the best mutual funds.
4. Investing in gold
Gold is a popular investment option once again due to its tangible nature. More importantly, all fiat currencies derive their value from gold reserves. However, the value of gold rises rather slowly and is not as lucrative as say a stock, bond, good property or mutual fund.
5. Investing in government schemes
Government schemes like the National Pension Scheme and Sukanya Samriddhi Scheme are safe investment options. These along with the PPF and VPF are also good options for those satisfied by nominal returns.
While all of the above are good investment options you should not invest without professional guidance. Especially since Cube Wealth has wealth advisors who will help you find the best way to invest based on your financial profile. A Cube Wealth Coach can explain the basics of investments to you for free, just email wealth@bankoncube.com with "Best Ways To Invest" as the subject line.
The Best Way To Invest Money
Investing is not a get rich quick scheme, instead, it is a consistent and disciplined approach towards growing wealth. The best way to invest money, therefore, is regularly and over a long period of time.
You must do the following things before you start investing:
1. Know Your Goals
Different people have different financial goals. You may be investing for financial freedom, you could be investing to save up enough money for a world tour etc. Whatever your financial goal is, you must identify and write it down before investing.
2. Know your risk appetite
Not everyone has the stomach to put in lakhs of their hard-earned money into the stock market or even mutual funds. Many people can't afford to block a large sum of money at once. This is why you must know what your risk appetite is. You can do this by talking to a wealth advisor for free just email wealth@bankoncube.com with "Best Ways To Invest" as the subject line or download the Cube Wealth App.
3. Automate your investments
The next thing to do is leave your investment to a Robo-advisor or wealth app like Cube. This is important because the human tendency is to invest when the markets seem promising and panic when things look shaky.
This is bad because you end up investing when the price is higher and the market is bullish and sell at a loss when the market is bearish. Automation also ensures you never forget to invest.
You are busy in life and you don't want investing to become an intensive monthly activity. It is best setup things on an app like Cube Wealth and let it take care of your investments.
All you need to do next is track your investments once in a while. That too just to see how much profit you've made.
If you have specific questions or want more tailored advice, please email wealth@bankoncube.com with "Best Ways To Invest" in the subject line.
