Stressful. Undoable. Impossible.
That’s how investing for beginners might feel. But we are here to tell you that that is not the case at all.
Investing does not need to be some untameable beast! It can be quite fun to invest and see your money work for you and grow – the only tool you really need in your arsenal is a good investment strategy – and you’ll be good to go.
So we’ve put together five easy (of many) such strategies for you to learn about – that can be hugely beneficial especially for the ones who are starting to invest as beginners or newbies.
You can employ one or a combination of these to create a robust investment plan for yourself and grow your wealth over a period of time.
Let’s dive right in –
If you are investing as a beginner, then a great way to stay motivated to invest is by practicing goal-based investing. This means that you are investing regularly with a particular goal in mind.
A good way to practice investing for beginners is to set a target of how much they want to invest, over what period of time, and for what purpose. This purpose could be to get the latest sneakers, that long-pending vacation with friends, or a fancy getaway you want to treat your parents to.
Invest with something in mind that will bring you the happiness that comes with good experiences! Practicing goal-based investing and earning returns can not only help you achieve your goals faster, but it also gives a direction to your investments and as you see your investment grow, you’ll find yourself more motivated to invest more! Pro Tip – If you know you need ₹10,000 for your goal – wait till you have invested ₹15,000 instead of just ₹10,000.
This gives you a nice little cushion amount that will ensure your investment doesn’t hit ₹0 and you have to start all over. Remember, that as long as you are being consistent with your investments, it’s okay to reward yourself a little bit now and then.
Don’t put all your eggs in one basket. It is a cliché, yes. But it holds true in the world of investing for beginners, or even seasoned players! We always encourage practicing caution when investing your hard-earned money, but that doesn’t mean you need to be rigid with your investment portfolio.
As a beginner, research what safe investing options there are and start there. Right from Public Provident Fund (PPF) and Fixed Deposits (FD) to the world of mutual funds and stocks – there is a wide scope of investment options out there. Start with simple SIPs and work your way up.
And while you start investing with low-risk options, simultaneously research what other options are available for investing for beginners, and slowly start to diversify.
Diversification is a great way to get some security with your money – as it allows you to distribute (aka mitigate) your risk – so that even while one investment plummets, there’s another that continues to steadily increase – meaning if one egg breaks, you’ve still got a few more to make omelets with!
We are a generation of lucky investors! Micro investing is a readily available option for us. Micro investing is a form of investing that allows you to automatically invest small amounts on a regular basis, and leverage the function of compounding to make big gains over a longer period of time.
Some micro investing apps even let you invest as little as ₹1 (*Cough*Deciml*Cough*). Starting small eliminates the pressure of having to save up huge lump sums of money to start investing for beginners, and allows you to start making the most of your money without losing out on time (aka the key ingredient to compounding).
Look, when you just start earning, you’re bound to go a little crazy with the nights out and the shopping sprees.
Micro investing (like through Deciml Round-Ups, for instance) can be a great way for beginners to start investing so that your money can start growing on the side. An option like Round-Up Investing with Deciml allows you to invest a small amount with every online transaction you make.
So for instance, if you spend ₹137, then Deciml’s Round-Up investing will round off that spend to ₹140, wherein ₹3 has now been invested for you! As a beginner who is starting to invest, it is important to remember that no amount of investment is too small – and in this case, you absolutely can make mountains out of molehills – literally!
If you are in fact starting small, then a long-term focus needs to also be an important part of your investment strategy. Why? Because small amounts of investments that are earning you returns, will over time turn into robust investments.
Take Deciml’s Daily Deposits, for example. Assume you are investing ₹100 through Daily Deposits every day. That amount in a month adds up to ₹3,000! And in a year that will roughly be ₹36,500! This is not even including the interest that you immediately start earning on your Daily Deposits.
So the time for which you stay invested can play an important role in determining your returns – especially when you are investing small amounts – and this is mainly due to the miracle of compounding.
Think of micro investing for beginners as a long-term commitment – the longer you stay invested, the better and higher returns you are likely to gain over a substantial period of time.
That said, no matter the amount you are investing – the time you stay invested for and allow your money to truly grow still holds an important role in your journey of wealth generation and financial independence.
Rupee Cost Averaging
If you start diving into the ‘how to invest for beginners’ research, you will find that one of the most common investment options suggested for beginners is investing in Systematic Investment Plans (SIPs).
Have you ever wondered why this is the case? This is because of the wonderful strategy that is Rupee Cost Averaging. Think of it as the tool that allows you to withstand market fluctuations while enabling your investment to still yield some returns at the end of your investment period.
As a beginner, investing huge sums of money is hard – as we’ve said before. So instead of investing lump sums in one go, SIPs allow investors to invest through regular installments of as low as ₹500 per month.
That’s not all there is to it though – there are more benefits to Rupee Cost Averaging and you can read all about it here.
The Deciml Daily Deposits App help you earn returns using exactly this method – so you can believe us when we say this one is a great strategy to leverage if you’re a beginner in investing!
The bottom line is this – investing as a beginner can feel like navigating a big scary world – but it doesn’t need to be so.
We want to tell you that investing can in fact be quite fun even if you are a beginner! You just need to look at it as an important tool for building your wealth over time.
Bear in mind that all these strategies are more like guidelines, and ultimately, you need to figure out the finer parts of these strategies to suit your own financial interests in the long run. You need to create your plans and then regularly invest to make those plans a reality.
We always recommend staying consistent in your investing habits and taking full advantage of the many micro investing options that are available out there today.
Well, what are you waiting for? Start investing now!