For a long-term wealth build-up, investing your money would be the wisest choice. Though sometimes it becomes overwhelming. Hence, it is important to know a few things to reduce the chances of loss before investing. According to Warren Buffet “ Risk comes from not knowing what you’re doing”. The basic understanding is important for future investment
Tenure of the investment: Many of us think that investing money would make us rich. However, this is a long-term process. A smart investor always looks out for the best investment that can reap money in a specific period of time. Instead of looking out for a short-term gain, find an investment plan with high return and low risk. There are two types of investment. Financial and non-financial. Financial type includes Public Provident Fund, Bank FDs, Bank RD’s, etc. Non-financial types include gold investment, real estate, and treasury bills. Some investment involves high risk while others involve low risk. It is necessary to research investment plans thoroughly before investing your hard-earned money.
Making plans before investing: Set specific and realistic goals like how much money you require to retire comfortably or how much money you need to save every month? If your need is not matched with the realistic number then you need to adjust your goal. Decide your investment strategy for long-term goals, choose more aggressive and high-risk investments but for short-term goals, you can choose lower risk and conservative investment. Always develop investment policy statements like specifying investment goals and policies.
Thorough market research: It is necessary to know about markets both domestic and global before investing money. The pandemic made a paradigm shift in the world economy, so you need to be thoroughly informed about the impact on your investment. Things you need to give a close watch on are interest rates, inflation, political events, and unemployment rates.
Financial adviser: It would be best if we take expert help before investing money. They can better chalk out the best plan to achieve your investment goal. They give a proper plan on where to put money or how much fees are required for these services, time frame, and risk tolerance to reduce the risk factors.
Conclusion: If you want to invest in a real estate project then look for the property location, cash flow, profit opportunities,investment purpose and the appreciation value.