Basic Rules of Money-2
Being Practical in terms of Money
Today most of the investors have several misconceptions about financial matters, the main reason being not keeping updated knowledge about the markets and severely ignoring this important aspect which affects our lives. Instead of taking help from the financial advisors they do not take any advice at all. Only very few take inadequate advise from family members, peers, relatives, colleagues etc., who themselves are not all educated in financial matters.
The only golden rule states that before investing any amount of money is to educate oneself about the market and its conditions and this can be done by reading newspapers, business magazines and other electronic and internet media. By any reason the person is unable to do so then one can take advise from the financial advisors (these people will you good advise).
Savings Vs Investment:- Here lies the major problem of whether to save ones money or invest money. Many experts feel that the first step is that saving money in small steps, for example, one should start saving money with immediate effect and all the unnecessary expenditure should be curtailed. Saving is done for having some extra money for the rainy day (bad days) and to counter inflation on a weekly or monthly basis. The good habit of savings should be practised at an early age and this should be done by each family member whether one is earning money or not. If one starts saving X amount of money on monthly basis then the money saved should be invested. Saving can be done by several steps money saved to be kept in piggy bank, or banks etc.
Then the next step that comes simultaneously is the investment. To increase investment start taking small steps one at a time and these are as follows:-
1. SMALL SAVING SCHEMES:- The small saving schemes and their fixed returns guarantee assured returns. Most of these have zero risks and it assures returns on the amount of money you invest. Most of these schemes are revised after three months and it is getting better and better day by day. These small schemes includePPF, Post Office saving schemes, NSC, Senior citizens savings, banks fixed deposits etc. are the few schemes where one can save money.
2. Buy An Insurance Term:- It is highly recommended to the individuals to buy this. Most of the people even do not have insurance and those have are inadequately insured. So, one should be doubly sure that if one is insured then one is getting maximum benefits. One can buy a term plan from an online source or through an agent. Here I would suggest as to buy from an agent as he will be to explain the finer points of the insurance term plan. Basically, insurance acts as a shield in case of any major mishap. Most of the insurance policies give a good return. General insurance policies give 4.5 to 5% and the policies with a larger frame of time give 5 to 6 %.
3. SIP:- It is also known as SYSTEMATICALLY INVESTMENT POLICY. It only reduces risk to a certain extent but it completely does not remove it. In the last few years, it has really gained momentum. Sip also sage guards market volatility.
4. Hold funds for a large period of time. It is widely believed that if you have funds then keep it, the bigger the period of time the larger will be the returns. It is between 7 years to 10 years your money starts doubling. Then here the money starts compounding by itself.
5. Lastly, start shopping online like from mega sales that go on these sites. Basic advantage that holds is that one can good brand of goods with the little or less amount of money. One can find a very large variety and one can shop at one's convenience. And by chance one does not like the product it can be returned also.
Always remember as one should not too many credit cards as they lead to a debt trap. And here the leakage of the money starts. So, the choice and the chance lies within oneself as when to start creating your own wealth.
So, there is always a correct time to start as one does not know what holds tomorrow.