The Building Blocks Of How To Invest Your Money – Forbes

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When it comes to investing there is no dearth of advice online or offline from blogs or Twitter threads and friends to relatives, everyone seems to have an opinion on how you should invest your money. However, there is no standard cookie-cutter approach that can lead you to instantaneous wealth. Investing is an art and a science, and it is important to develop a the financial literacy needed before embarking on your financial journey. Here are some things you should know.
Apart from drawing a regular salary, there are many other supplementary ways to make money. Investing is one of those ways; in fact, it is one of the best ways to help your money grow and make it work hard for you. Smart investing can become akin to a second source of income and eventually help you to tide over difficult times, save on taxes and help build a robust post-retirement fund.
Below are some of the most prominent tools and approaches that can help you to invest money wisely.
Often used only in the context of blue-collar workers, the cookie jar method is an effective method for financial planning. In essence, it is a method of investing that allows you to save and invest in multiple buckets that are earmarked for different purposes.
Think of it from the perspective of a child saving up enough pennies in a jar from their pocket money to buy their favorite chocolate. An adult version of this would mean using high yielding online savings accounts or fixed deposits that are reserved for specific expenses. This seemingly child-like method is surprisingly effective as a first step towards allocation of funds and the management of expenses.
Taking financial advice from algorithm-based apps and online platforms that are devoid of any human element may seem odd and unconvincing at first. However, robo-advisors use algorithms to draw-up detailed profiles of investors and then suggest personalized investment solutions. With the help of technologies such as artificial intelligence and deep learning, robo-advisors work to understand and eventually predict investor’s financial goals, preferences and determine risk.
Automated investment advice is a field that will gradually disrupt and improve the financial advisory space due to the high level of personalisation it offers. Also, they aren’t complicated to use and even novices can invest with the help of robo-advisors. They come in the form of inexpensive and user-friendly apps, and require slightly lower investment minimums than traditional investment firms. It is advisable to invest your money in a highly-diversified and low-cost portfolio consisting of good stocks and bonds.
The stock markets are traditionally seen as a volatile and risky investment hub. However, with a little bit of research into the basic principles of stocks and some self-set ground rules, it is possible to earn robust financial gains.
Retirement is no longer confined to those in their 60s. Gen Z has a whole different notion of retiring early after having created significant wealth so that they can pursue their passions while they are relatively young. Therefore, it is never too early to plan the process of retirement! Retirement planning involves the setting aside of money, investing it, and then directing it towards your retirement savings fund. You have to factor in spending habits, average life expectancy, and health conditions while calculating your retirement savings needs. An ideal retirement plan is based on three factors:
While this might seem like an oxymoron considering how gold is always seen as a physical asset to be possessed personally. The concept of digital gold is fast catching up. Digital gold is essentially an online product that allows you to own gold without a bank locker or a safe to store it.
This means that a seller keeps an equivalent weight of physical gold in a safe/vault. The advantage here is that there are no minimum limits, so you can even buy gold worth INR 500 or INR 1,000. This can be done in the following ways.
Investing money may seem like a series of daunting tasks initially. However, with the help of myriad online apps and platforms, investing has been made easier. Even starting with a small amount of money is a big step towards securing your financial future in the long-term.
Milan Ganatra is the co-founder and CEO of 1Silverbullet. He started his journey towards building technology-led solutions for the financial services sector in 1999 with Miles Software and is actively involved in investing in finance companies.
Aashika is the India Editor for Forbes Advisor. Her 13-year business and finance journalism stint has led her to report, write, edit and lead teams covering public investing, private investing and personal investing both in India and overseas. She has previously worked at CNBC-TV18, Thomson Reuters, The Economic Times and Entrepreneur.

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