There are so many different places and avenues out there for you to invest in. The most famous ones of these include gold, property, bank deposits, stocks, and mutual funds. Even within each of these categories, there is a plethora of choices and options to explore. This is precisely why investors struggle when they are confronted with the question of making an appropriate investment. There is only a limited amount of time that can be spent on making the decision, and the choices are simply endless. And ultimately, what happens is that the salesperson that can persuade us the best ends up becoming the decision-maker of our financial lives. Financial decisions, then, get reduced to mere product choices, which are highly dependent on how well someone can influence us and pitch in an idea.
Apparently, the only solution to this is to learn to choose the right financial product ourselves. But this, too, is a faulty approach. If you consider your product to be the most important thing in helping you gain your monetary goals, you have already lost this battle of the finances.
This may seem to be quite contradictory! After all, the entire system is based on these financial products. In fact, even the government’s operations are centered around these financial products. Still, this approach to investment is totally wrong!
The best way to start investing is not to gather information about the different products that are available for you to choose from but to figure out your own saving and investment plans. Begin by getting to know your financial requirements. Why do you need to save, and what will you do with the saved money? When do you think you will need the saved amount? And what if it is a little less than what you expected? Are you even sure of the amount that you need?
Surprisingly, so many of us have never sat and thought about the answers to these questions. And what is expected of you here is not to foresee the future, but to at least know and understand the precise needs in the future that you can easily predict now. Everyone has certain financial goals that they need to meet at specific points in the future, and the best way to do that is to understand your own goals.
Every financial goal of the future will have to be addressed differently, with different time frames, risks involved and return levels. For instance, you might need money for your son’s higher education. Or you may be planning to buy a house for yourself within the next ten years. Maybe, you want to travel to the States after two years, or you want around 5 lakhs to be always available to tackle any emergency.
All of these goals are highly precise, and the approximate amount you will need for the same, along with the risk that is involved in each, can be easily quantified. In such a case, it is not tricky to determine which financial product will help you fulfill your goal.
In conclusion, it can be stated that any person does not need a single pool of savings for all of his or her needs. Instead, everyone should have a range of financial goals, and a list of financial instruments to achieve them, depending on the requirements of each. Only when you can finally decide on these goals can you sit to narrow down on a particular investment.