Table of Contents
Chapter 1: Growing Your Wealth with Investments
Chapter 2: Learn How To Invest
Chapter 3: Cash Investments
Chapter 4: Investing in Stocks
Chapter 5: Investing In Bonds
Chapter 6: Investing in Real Estate
Chapter 7: Investing in Mutual Funds
Benefits of Investing
Investment may mean different things to different people. While it means financial security for some, it may mean increasing wealth for others. Whether you are investing for safety, income or growth, it is important to have realistic goals and expectations because investments cannot bring you returns overnight.
There are no set rules or guidelines for investment that can be universally used by one and all. Investing money is a personal thing and should be based on monetary goals specific to you. What could be a wise decision for you could be a foolish investment for someone else and vice-versa.
Whenever you invest, remember that it is to earn money for a better standard of living, to own a dream home or a car, to spend on your loved one or on a cause you believe in, and not just to keep your money growing. To know what investments to consider and how much to invest, you should be very clear about what you want from your money.
Properly planned investments can give you financial security or simply help you in increasing your disposable income. Maximizing investment benefits requires proper research, knowledge and common sense. Here are a few key reasons why you should consider investing:
Growing Your Wealth
Accumulating wealth and enjoying its luxuries is one of the major reasons why people invest. It is better to invest your money than keeping it in a piggy bank, if you want it to grow. The money in your savings account or a checking account will earn some interest and keep it safe, but investing in mutual funds, bonds or stocks could increase it significantly.
Achieving Financial Goals
Achieving financial goals like purchasing a house, a luxury car or going on a dream vacation is possible by investing money. Investments plans can be long-term, short-term or medium term depending on your purpose of investment. You can choose a medium term plan to go on a world tour after a few years, or a long term plan for your retirement comforts or your child’s college education.
Beating Inflation
Inflation increases the prices of commodities, brings your purchasing power down and can potentially lower your standard of living. Although inflation weighs down the profits of most companies in the market except a few related to the food and consumer goods industry, by investing wisely, you can beat inflation and make your money grow at a rate faster than inflation.
Other investments like fixed-interest cash investments, bonds or securities, are also affected because of inflation, bringing down your returns. But through special securities like the Treasury Inflation-Protected Securities and the Series-I bond, you can protect your money from the negative effects of inflation. Creating a diverse investment portfolio is another way to protect your investments from inflation.
Who Should Invest
If your income is more than sufficient to meet your basic needs, you should be able to invest for a better future. Whether you are at the beginning of your career, in the middle of it or close to retirement, investment will be good for you, provided you plan it well.
But if you are among the many people who are carrying the burden of heavy debts, investment should take a back seat until you get rid of your debts. The first thing to do before you invest is to get rid of all your high interest credit card debts and mortgages that eat away a substantial part of your income leaving nothing for investment
Putting away money for investment while paying a lot of money towards interest on your loans is not a good idea as what you pay towards interest could be more than what you would earn through your investments.
But this does not mean you shouldn’t use your home equity or credit card at all. Use it only when needed, such as in case of emergencies, and pay the outstanding amount on time to avoid high interest charges. Once you are free from debt, you can start planning your investments and grow your wealth.
Next Chapter: Learn How To Invest
