We as a student mainly our life revolves around three things those are College and project submission, then Netflix and planning finances, anyhow we manage the first two things but face a great dilemma while managing the third one.
Certain thoughts like should we approach for higher studies or what about our existing loan? Which job will be suitable for us? Etc.
So, how to plan and secure your finances?
During our school and college life we all get to learn that we can score higher not by studying hard but also by strategic and smart work. Similarly to build up a safe and secure future we all need to plan strategically.
So what is the right time to invest and how should we plan our investment.
It is very important to make investment for early stage (EARLY INVESTORS ALWAYS GAIN FROM THE POWER OF COMPOUNDING), taking a very simple example to understand the power of compounding, a person who made an investment of only 1000 rupees 35 years ago in Wipro will get an return more than 50 crore. But for that it is very important to invest that amount for that time period.
So, here we see that when we are investing a amount in our early ages between 20-25 then we get a huge return of that amount and one day will be the owner of such wealth to finally sit and enjoy. On the other hand if one starts his or her investment in 35-40 years of age then by the time the amount to compounds to a good wealth, it’s too late.
So amongst the various options available in the market what will be best for a student?
Whenever we hear about the word investment we think about a Savings Bank Account. Now the name SAVINGS is very misleading here, because instead of savings we continue to do every type of expenses from this account, such as food ordering, mobile recharge, our credit expenses etc and withdrawal from this account can be done very easily with debit card or net banking, so instead it becomes an expense account for us.
Another instrument which comes to our mind is GOLD, but it is very essential for us to consider the form of gold that we are buying. For example in maximum household jewellery is bought as a saving instrument, but some crucial factors must be kept in mind such as the making charges, impurities on selling the jewellery there is an extra cost incurred for that, so when there is so many deduction the ultimate return is not satisfying, so investing in gold in form of jewellery is not good option.
Best method to invest in gold is “SOVEREIGN GOLD BOND” it is a type of RBI digital gold or in simpler terms it’s a gold certificate. Pros about this are- there is no making charges incurred, no stress relating to the safety and security of the gold because it is stored digitally. So, for example if we buy a 50,000 rupees gold certificate we get 1.5% interest over that amount, so here we think that 1.5% is not such a great percentage but we also need to keep in mind that we have purchased gold of 50,000 so with the price appreciation of gold the certificate value will also increment. For students it’s a good option because one can start investment from a minimum value of 4000 rupees, further it can be purchased digitally.
Next comes, STOCKS it’s a direct share- it has given the greatest amount of return amongst all other asset classes. Today there are more than 5000 company in share market. Investing in share market means to become a part owner any company. Taking a simple example suppose one has 5000 rupees and thinks of investing so he invests in Tata car motors in which they have cars like Land Rover and Jaguar or can also buy Maruti, so in just 5000 rupees one gets to become owner of Tata motors and experienced business tycoon like Ratan Tata is managing your share free of cost.
This is the benefit of share bazaar that one can choose the best business, best managers, who will work in return. Investing in share bazaar can be the turning point of one’s life.
The final investment is the Mutual Fund in this category shares are not bought directly, all the small funds collected are from various persons investing in that mutual fund and the Fund Manager (a stock market expert) invests on behalf of the person, here less risk is there as compared to stock market investment where one has to do their own research and invest at a right place, but comes with less return than the former as there is the fund manager’s commission and risk control measures.
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