Basics of Investing

Many People think that investing is a rocket science and you need to be a financial whiz kid to do it.
No, it’s not true for managing our personal finance at least. The basic things to be known and followed are:

1. Understand and write down your short term and long-term financial goals. (How much you need at what time).

2. Understand Inflation. (Rs. 1 you have today is going to loose its purchasing power as time goes by)

3. Understand the tax laws and their impact on your income. Most of us think that tax is too complex to handle and we loose a hell lot of money by not doing proper tax planning.

4. Understand Risk and Return. Unless you are going to take risk, you are not going to get a good return.

5. Understand the different investment avenues available-– Realise the power of equity.

6. DO NOT invest in an instrument based on someone’s advice alone (be it a broker or a friend) – do it only when you understand it fully.

7. Make out an Investment plan based on these and start investing regularly.

Learning to invest is just like acquiring any other skill. You need not be extraordinary to do it.

NB:- Understand the difference between real investment and idle capital expenditures.

Articles on Inflation

Articles on Equity Advantage

Other Articles of Relevance

I think you are ready to get a great start now.

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