In addition to your 9 to 5 job or running your own business, you also need a hobby, which can take a bit of your savings, nurture it and return it back to you in the form of a retirement fund. It should be like putting an egg in a basket and finding a whole poultry farm after a certain period of time. If followed correctly, investing can make your money grow and make your bank account glow by the time you are ready to retire.
Anytime is the right time, provided you have a small amount to invest. It could be as low as 100 dollars. You can also invest more, but keep an upper limit of investments. Once you start investing, you might start earning some profits and these can be re-invested back. When you start receiving big amounts from your investments, you can start removing that amount from that investment cycle and invest that money somewhere else or spend it on any pending expenditure such as your child’s higher education or a marriage in the family. Once you start investing, you will have to keep an eye on the path your money takes. If you are investing in Fixed Deposits in your Bank, then all you need to know is its maturity date and the amount you will be getting back, but in the case of shares and mutual funds, you will need to track it almost daily. Set aside some time from your day’s work to keep track of these investments. Make a chart, even an excel worksheet will do, mentioning your investments, the purchase value, the current value, and the maturity date if any. This chart will give you an instant idea of your investment position.
If you are a novice in investing, take the help of a friend or use the services of a broker to invest. The safest investment with almost the least returns is your Fixed Deposit in the Bank. Keep some amount in fixed deposits to help you out in case of any emergency. Link this amount to your savings account so that you can withdraw money from any ATM in case of an emergency like hospitalization or burglary on a weekend. If you want to earn a little more without major risks, then you can invest in mutual funds. These mutual funds also come in high, medium and low risk options where the companies invest in the stocks of various companies and share the profits made by them with you. Invest in proven blue chip companies where the risk is low to medium. This will ensure that your money grows slowly and steadily. Once you get the hang of it, you can try investing in high risk and high return mutual funds. Or if you want to earn more money in a short time, then you can invest in stocks. This will require more skills and even luck, if you are to earn more money out of dealing in stocks. The trick in investing in stocks is to buy when the prices are low and to sell when the prices are high. There is no right or wrong time to invest in stocks, and the key is not to be greedy but to sell out when the market is higher than your purchase price. Earning lesser margins, but rotating your money faster is the key to earning quite a lot of money in stocks. However, start with small deals and then proceed towards bigger deals. Also do not invest in only one company, however reliable your tip or your gut feeling is. Invest in different companies in different fields like engineering, software, etc so that in case of any slump in one field or sector, you still have other stocks to cover up your loss. Follow the saying ‘Do not put all your eggs in one Basket’. Invest some amount into Fixed Deposits, some into Mutual Funds and the rest into stocks. If you have gained quite a lot of experience, you can then think about investing in Commodities Trading, which is somewhat similar to trading in stocks, the only difference being that instead of buying and selling stocks, you would be buying and selling commodities like wheat, corn or even crude oil. Such dealings, especially in very volatile items like crude oil and steel have turned many people into millionaires. However, do not enter this market without knowledge or help.
You can buy many investment self-help books and magazines from any bookstore. If you do not have any accounting knowledge, then attending a short course or workshop is essential to at least make you familiar with terms such as equity, debt, etc. You can also hire a broker to help you out and you can contact your tax consultant to study the ramifications of your profits from your investments. Your consultant will guide you in ways to save your taxes from the profits, which you may earn from your investments. You could also turn another hobby into an investment. For example, if you are interested in art, then you could invest in a painting or antique artifact and sell it off for a profit. However, the same principle applies here, too. Start small, get the hang of the art market and then think about going big. In any investment, be prepared to lose out in some deals. Keep an eye on the big picture. Your aim is to make money in the long run and losing out on some deals should only teach you a lesson so that you do not repeat the same mistake again. If you have a decent amount to invest, then in the present sub prime state, you can even pick up properties at a very cheap rate and put it up for rent, thus assured of a fixed monthly income. You can always sell that property once the market picks up. In any case, if you are a novice then catching hold of an efficient broker and staying with him over a long period can be beneficial to both of you.
So, do not just think about investing as a scary cave where you could get lost, but think of it as an interesting hobby which allows you to play monopoly with real money. By treading carefully and holding on to a good broker and tax consultant, you can ensure that when you reach your retirement age, you will have a basket filled with goodies at your doorstep.