Wednesday, 23 March 2011

Plan your investments to earn more in time

When you hear about investment you may not think anything more. But you have to plan your investments wisely. Here I wish to write about some investment realities which all investors must follow to earn a good harvest from your hard earned money.

Start investing at your early age

If you start investing at an early age you can get enough money to fulfill all your financial goals when you reach such a stage. So start investing when you start earning yourself. At the same time you should think about your retirement time. Start a good retirement plan also when you start earning and investing. The children also should be educated to save from their pocket money. Then the habit of saving and investment will be sprouted in the tender minds.

Try to balance safe investment and risky investments

Safe investments such as fixed deposits and other bank deposits are good. You will get a steady growth of your money and there will not be any loss. But you must go for high earning investments also. Fixed deposits gives steady income, but the income is taxable and the tax will reduce your income a lot and also the changing of policy may reduce the interest rate and your income potential may be very less. Investments in Fixed Deposits (F, D) will not beat the inflation also. So do not invest all your money in fixed deposits.

Try to be a good investor

A good investor must be a good observer. He should be vigilant about the ups and downs of the financial market and also the current trend of the world. Read more and learn new investment ideas and methods. Don’t be in a hurry, be disciplined and use your common sense when taking investment decisions. You can seek guidance from experienced persons and financial advisers, but take your own decision yourself. Because it is your money, so the decision also should be yours.

Be disciplined with stock market

Through stock market you can make money. But you should be vigilant and disciplined. You cannot make any money from stock market in a hurry. Learn all aspects of stock market and invest for a long time in the shares of strong companies. Start with a small portion of money and when you get enough experience, try to increase the investment. But keep in mind that does not put all your eggs in one basket. You should invest only a portion of your total investment portfolio in stock market. If you are a lazy investor, you do not put your money in stock market. An investor in stock market should be more vigilant about the day to day changes around him.

Diversify your investment

As I mentioned above, you should diversify your investments in various investment methods such as fixed deposits, different shares, mutual funds, government securities etc. But do not over diversified. If you diversify more you cannot concentrate in all these investments and your return will be less. So keep balance in diversification also.

Invest in the right time

If you are much vigilant and wise you can earn more from your investments. When the recent recession happened, some wise people made a lot of money while investing in deflated stock market and mutual funds. When the market regained, they got a good profit. But some investors already invested all their money in stocks and mutual funds and when the market came down they could not recover their money and somebody become insolvent also.

Do not follow the multitude

While investing, you must not do what others do.  You may get income just like others get. But if you think your own way and do accordingly you can get a good catch. Learn that everybody will not get good catch. Only a few people will get. So be one of such few investors.

Invest in tax saving instruments and other instruments in the same time.

The goal of your investment is getting enough money to fulfill your financial goals. Not for saving tax. You can invest for saving tax, but that should not be your ultimate goal. Invest in tax saving investments, retirement plans; invest for children’s future and also for meeting medical expenses and other emergencies. Do not forget to take enough insurance cover to secure your family and dependents from any accidental events.

So be a vigilant and a disciplined investor and multiply your money legally and fruitfully. We, investment and money matters wish you all success.

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