Sugam Agrawal’s Answer
The best approach to start investing is:-
- Firstly, Get Insured --> Get Term Insursance & Medical Insurance(covering your dependent family members)
- Secondly, Create a "Contingency" fund --> Typical best practice is to save 6 to 7 times your monthly expenses and keep increasing it every year based on the increment in your monthly livinh expenses with a goal that you always have 6/7 times the monthly expneses available to you in fully liquid form
- Thirdly, put aside the monthly expenses from your pay-check and find out what best you can start investing each month (monthly expenses include all the outgo for insurance, contingency, loan payment etc. beyond the living expenses)
- Now you have reached a no. that you cna vouch for investment for each month
- You can either get an advice (need to pay for it) from an investment advisor OR start with the following approach: a) Depending on your age bracket(I am assuming you are in your 20s), allocate 70% of the available monthly sum to the Mutual Funds directly investing in Equity Market e.g. pick-up the perfomance history for any top rated funds and start investing without much thought b) Allocated remaining 30% in Debt instruments (advising for India based individuals) but again Mutual Funds only and not any FDs
- Remember, the earlier you start investing the better it is as you are sure to gain from "Power of Compounding". A simple mathematic calculation reveals that if you keep investing say a 20,000 INR each month for 30 years, you will end-up with a handsome sum of ~7 Cr. INR. Hence don't think much and start investing in any top rated fund. You can also keep checking the fund's performance once in a year but otherwise as far as you keep on investing, you WILL reap tyhe benefit for sure.
Happy Investing !!
You can invest in most securities with the use of a brokerage account or other similar account such as an IRA. Start off by researching terminology on investopedia such as stock, bond, index. Low cost broad market ETFs are likely to be the smart choice from a securities investment point of view. (Example ticker symbol SPY)
Keep in mind you can invest in many other ways as well from Real Estate to Lending. Banks also offer high yield accounts, Certificate of Deposits etc.