Why is Investing Important and Where Should You Invest as a Beginner in 2024

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The importance of investing cannot be stressed more than it has been, especially if you are a beginner and want to learn about investment and the channels and instruments to invest in. Learning about all this will help potential investors grow wealth and save for the future.

In a year when inflation is hitting everyone hard, one of the potentially optimal ways to combat this bane is through solid investment. Investing can be challenging due to the wide range of instruments available to beginners today, but with diligent reading and learning, you can find sound investments to support you throughout your life. If you think the stock market is one of the only ways to find profitable investment, you may not be wrong, and the first step is a Demat account opening. Nonetheless, there are other investment options out there, but first, you should know why investing is important, especially in the current age we live in. 

Article Highlights

The highlights of the article on the reasons for investment and the potentially optimal investments for beginners in 2024 are mentioned below:

  • What is investing?

  • Why is investing important?

  • Where should you invest as a beginner investor in 2024?

What is investing?

Life teaches us many lessons, and if learn from them, we will be better off in the future. One of the most important of life’s lessons concerns financially securing your future. In previous times, individuals believed that the good old way of having a corpus at, say, retirement was to save for it. However, with life’s uncertainties as we know them now, simply saving is not enough. Investing is the solution to building a secure financial future. 

The first thing to learn about investing is what the concept means. Investing is a process in which an individual buys securities or any item that may generate income or deliver appreciation. In the realm of finance, an investment is anything that generates an income or grows your wealth. This could be a bank fixed deposit or real estate. A bank fixed deposit gives you interest as your gains and real estate can generate rental income. You get capital gains out of both these investments.

Why is investing important? 

Investing is important, especially investing money for beginners, for multiple reasons. The broad reason to invest your capital is to grow your wealth instead of just letting it sit in a bank with a low interest rate. Investments include a wide range of financial products that may be suited to an investor’s unique financial goals. Any individual’s goals are based on various factors like age, risk tolerance, and income. Investment products include stocks, fixed instruments, mutual funds, bonds, and more. 

You can start investing at any age, but the earlier you start, the better, as you have a longer period in which to grow wealth and collect it, and you can afford to invest when you are younger and have a consistent income. Consequently, investment for beginners is a pertinent and often, overlooked, issue. Whatever your age income or outlook, here are the reasons why investment is important:

  • To hedge against growing inflation 

  • To build wealth to meet necessary financial requirements and fulfil desires in the future 

  • To have a corpus for retirement when you have no income source 

  • To support your dependents 

  • To fulfil the plans you have for children, like higher education expenses or marriage

  • To afford healthcare when you require it

  • To have a corpus for emergencies and unforeseen circumstances 

Simply saving your salary is not enough, growing it is the important aspect. 

Where should you invest as a beginner investor in 2024?

Investing may be an easy task for some, but it is difficult for others, not because they lack the motivation to invest, but because they don’t know where to start. So, where should you invest if you’re a beginner investor in 2024? Here are some key ideas that will set the ball rolling in your investment journey:

  • Stocks

Stock investments may be considered risky, but stocks, historically speaking, have the highest potential for growth of wealth than traditional investments. When you’re a beginner investor and you have age on your side, just starting employment, you can afford to take a few risks in investment which may potentially deliver lucrative returns. 

  • Mutual Funds

You can consider mutual funds in investing for beginners, as these are relatively less risky than stocks and pool investors’ funds and invest the pooled amount in different securities to suit investors’ needs. You get a variety of securities in mutual funds from equity-focused to debt-centric and hybrid funds to match your financial goals. 

  • PPF

It’s a potentially lucrative idea to begin a PPF (Public Provident Fund) account if you’re a beginner investor, and especially if you are a young investor. This is a government backed scheme with a fixed interest rate, but your wealth grows due to the effect of compounding. So the longer you remain invested, the more your capital grows. This is a safe investment and is potentially sound for novice investors.

  • Bonds

Bonds are also considered relatively safe investment instruments and give you fixed or floating rates of interest. Some are government-led and are more secure than corporate bonds for beginners.

  • Gold ETFs

If you’re a beginner, you may want to play it safe by investing in a reliable instrument like gold. With gold ETFs, you can still invest in the precious metal, without holding physical gold. You can invest a minimum of the value of 1 gm of gold (=1 unit). In investing for beginners, this is a stable investment. 

Investing - The Way to a Secure Future

The investment instruments mentioned in the article are not the only ones out there. There are a plethora of potentially optimal schemes for beginners like ULIPs and SIPs, and other fixed instruments you can opt for. Whether a novice or an experienced hand, you should consider your financial situation and goals before you invest. 

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

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