If you leave money in a savings account, it will not grow. In fact, with the speed at which the value of money is decreasing currently, you will have less money in the future if you leave money in your savings account. Therefore, it is necessary to investin order to maintain the value of your savings.
However, you cannot just invest without conducting thorough research, as there are several factors which determine, how much you are investing as well as the method through which you are investing. Listed below are several factors which need to be considered carefully, before making any investment decisions:
Goals
You need to start with outlining your goals in life, and how much money will be needed to achieve these goals. Once you know what you want in your future for yourself or your family, it is easier to make a decision.
Duration of investment
You can start investing at any age, and therefore you need to decide till how many years you plan on investing. Once you decide this you can take advantage of the compounding system, to increase your money significantly.
Risks
Whenever, you invest there is some level of risk involved, which is why risks are divided into, low-risk, medium-risk and high-risk categories. Depending on your situation in life, you can choose the level of risk you are comfortable with and choose accordingly. However, keep in mind, if you choose to earn a huge amount in less time with a limited sum of money, the level of risk is always high.
Returns and liquidity
Another factor you need to understand well, is returns and liquidity. In this way, you know how much you will get from investing a certain amount using a certain method and when you can get it.
Now that you know how important how important conducting research is before you start investing, remember to consult our expert financial advisors at Arthavidhi, to make smart investment decisions, which will benefit you in the long term.
