Last Updated on December 28, 2019 by Gopal Gidwani

You might have heard the popular saying, ‘there are two sides of every coin.’ This common phrase holds true in terms of investments. While investing can involve market risks, it allows the growth of money over a long time. However, many people have only false perceptions and myths about investments due to the fear of losing money. According to a report, only 2% of the Indian population invest in stocks. Who should be blamed for keeping people away from investing in the equity markets?

Investing in multiple types of investment plans can allow you to generate wealth for fulfilling all your long-term goals. However, you can reap the benefits of investments if you know the right way to get started. Therefore, let’s go through these top six suggestions, which can guide you through the investment path.

1) Identify your investment goals
The most essential step is to identify your primary goal of investments. As an investor, you might have either long-term goals like saving for retirement, child’s wedding or short-term goals like purchasing a new house and car. According to your investment objectives, you should put your money in those plans, which can obtain substantial return on investments.

2) Choose the right investment amount
As an investor, you might wish to park all your funds in an investment instrument in one go. However, there can be chances of earning better returns if you invest a small amount depending on the market performance. Therefore, pre-decide the amount you want to invest in a systematic manner at regular intervals.

3) Consider your risk appetite
Investments and returns are co-related to one another. The returns you receive from your investments can depend on your risk appetite. When you have a high-risk appetite, you might invest in the equity market, which can provide high returns. However, if you have a low-risk appetite, you should invest in debt funds, which might offer relatively low returns.

4) Invest at a young age
Investing at a young age allows you to reap the benefits of compounding. With compounding, you can earn interest in your returns. Since you have more time in your hand when you are young, you can build a substantial corpus for achieving your goals in the future. Moreover, you can yield high returns since you can afford to bear the risks of the market at a young age.

5) Examine your financial condition
Before choosing any investment plan, you should always examine your financial condition. Moreover, you should consider the financial needs of your loved ones. As an investor, you should take your short-term and long-term goals into account. Based on your goals, you can invest monthly, quarterly, and yearly to fulfil your goals.

6) Compare various types of investment plans
Today, investing has been made simpler due to the wide range of available products like a Unit Linked Investment Plan (ULIP), Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), etc. in the Indian markets. However, the diverse range or types of investment products can leave you in confusion. Before deciding where to invest money, you should understand the different financial products and compare their benefits. At the time of purchase, buy an investment instrument, which is based on your financial needs, investment goals, and risk appetite.

As highlighted above, the key to successful investing is to start your investment planning as early as possible. As an investor, you should park your money in a financial product in your 20s after you receive your first pay check. With these suggestion on how to invest money mentioned above, you can grow your corpus to build a secure future.