Investing can appear to be a complex process and each individual should ideally approach investing in his or her own way. However, there are a few basic principles one should consider while making investment decisions that can act as guiding beacons. These principles are listed below:
- Do your research and start intelligently: As they say, “Well begun is half done”. Research and learn all the various options available for investing your hard earned money so that you are well informed and better-equipped to make logical decisions right for you.
- Start investing early: The benefits of compounding can dramatically alter the outcome of any investment. Compounding essentially means interest earning interest, or in other words, your money making more money for you. Here is an example to illustrate the benefits of starting early and investing regular sums of money. Rohan and you start investing Rs 5,000 every month, earning interest at 12% per annum on a yearly compounding basis. The only difference is that you started at the age of 25, while Rohan started investing at the age of 30.