Investing is not everyone’s cup of tea. Some can manage on their own and some do not know the basics of investing. To invest, one has to first set their mind to it, so they can start saving. It’s very difficult for some to start saving, because they may not be earning that much also. But now, you don’t need to be rich to invest. The minimum amount starts from Rs. 500/- only. So you can start small and increase the amount little by little.
People realize very late the importance of saving and investing. Children should be taught to save from small. So, as they grow they realize the importance of it. Some parents give their children everything they ask for, sometimes things that are not even required. This makes the children dependent on their parents for everything and they don’t see the need to save.
Investing works step wise, as you can see below:
1st step: Earning
2nd step: Saving
3rd step: Invest
4th step: maturity fund (can be reinvested)
For beginners to start investing, it is a task, especially those who have no idea about investments. To get into the habit of investing, one has to start saving. The things that we want, well the list is never ending. So, trying to fulfill all our wishes, we forget that savings is also necessary. Once a person starts saving, it becomes a habit and their investments increase too.
One big advantage of paying taxes is that, people have to invest to save their taxes. This is a very good opportunity, because it will indirectly put in the habit of saving. It is always better to start early, since you can take risks at an earlier age. It is not so in the case of older people, they can’t take a risk with their money, as they are coming closer to retirement and they need all the funds, they can get.
Related Article : 8 Common Investment Mistakes You Must Avoid
Boosters that help beginners to start investing:
- Savings: It is hard to save when there are so many things that you want to buy. There’s a way you can balance both out. Make a list of things and write them priority wise. Then you can divide it in the coming months, according to when you want it. At the same time, the money that your saving from buying the other things, can be invested. You do not need to invest in complicated investments. You can start with investments in debt or equity mutual funds.
Future Goals: Investing helps one in the future. All of us have goals in life, most of them require money. It doesn’t mean that just because you don’t have goals, you don’t need to save. As your earning increases, your purchasing capacity also increases, which in turn increases your goals as well. So it’s always better to start saving early, so that it becomes easier to fund your future goals.
- Tax Benefit: If your earning a good salary at a young age, then you are bound to come in the tax bracket. This gives a boost to the people to invest in different tax saving avenues, which automatically in builds a saving habit. So if you invest the maximum amount and use the tax saving tools to the maximum, you can bring the tax to nil.
- Emergency Fund: No one ever realizes the importance of keeping an emergency fund. You never know what can pop up. For example, If a person looses his job, he will have to survive on some funds till he gets back on his feet. Another example is falling sick or getting diagnosed with a dangerous disease. So emergency fund is very necessary as it acts like a backup to fund unfortunate situations.
- No Begging And Borrowing: we all have experienced the feeling of not having money and then begging and borrowing. No one likes to beg or borrow. It’s another feeling altogether when you are earning and spending for your own needs. Start saving now and it will help you pay for your own expenses, so why be in debt of someone else, when you can fend for yourself.
- Financially Independent: Having your own savings and investments, reduces the financial burden for your family and it leaves you financially independent. This way you do not have to worry about funding your goals. No one likes to keep asking their parents for money again and again. It gives one a proud feeling to be financially independent.
