Friday, October 26th, 2018
How to Invest: A Beginner’s Guide to Investing
Investment is a method by which one aims to grow the money one already has by investing it in various instruments according to one's risk appetite. Generally, it is observed that the higher the risk, the better are the chances of return. There are many options available for investing and one should carefully plan how to invest savings in different instruments in order to achieve one's financial goals in a timely manner. One should also keep in mind to distribute money in different kinds of instruments and not concentrate only in one. Some of the common ways to invest are discussed below:
1) Conventional Investment Instruments - Some of the safest instruments for investing money are Savings Account, government related schemes like Public Provident Fund, National Savings Certificate, National Pension System, Insurance Policies, Fixed and Recurring Deposits, RD with Post Office, PPF, and so on. They are completely safe which provide fixed rate of interest and also have the added advantage of saving taxes.
2) Non-conventional Investment Mediums – Direct Equity, Mutual Funds (SIPs), Equities, IPOs (Initial Public Offerings), ULIP they belong to a slightly riskier category where one can earn high rate of interest but also faces some risk of losing money because of adverse fluctuations in stock and currency markets.
Always be prepared -
Financial emergencies can arise anytime in life. Hence it is required to be prepared for any such financial emergencies with emergency funds. Investing in places like the stock market is risky when it comes to emergency funds. Many financial advisors also recommend to be focused on high quality liquid fixed income securities or money market investments. The purpose of an emergency fund is to have money in case of an unplanned event such as a layoff or unforeseen medical expenses.
What to Do in Financial Emergencies
When one is in some kind of financial need, he / she generally turns to options like banks or expensive options like credit cards, etc. It is very difficult to avail loans through banks when one's credit score is not good. In such situations, instant loan app comes to the rescue of common man. One should apply for personal loan through such apps for a number of reasons like:
1) Determination of Creditworthiness on the Basis of Social Loan Quotient -
Personal loan apps like CASHe have devised a new system of determining creditworthiness of an individual which is SLQ, Social Loan Quotient, which is calculated on factors like a person's Facebook friends and his interactions on social media.
2) Lower Interest Rates Than Some Conventional Methods of Borrowing:
The better the SLQ score of a person, the better rates of interest and more amounts for loan one can get.
3) Ease and Convenience:
The entire process of applying for personal loan is hassle free. All one needs is a copy of your PAN card, Aadhar card, latest salary slip, & last three months’ bank statement.
For better financial health, it is recommended to plan and invest in the best instruments possible and apply for loans using personal loan app only when the emergencies occur.