Investing your money is one of the best financial decisions you can make, especially when you start early. After all, the earlier you start investing, the more time your money has to grow and compound. However, investing can be challenging, especially if you are a beginner. The good news is that many investment opportunities are accessible for beginners who require low upfront capital, making it easy for anyone to start building their wealth. Learn how to invest here!
Key Considerations Before Investing
Here are the things you need to prepare before you start investing your hard-earned money in anything:
1. Determine your goal
First, you should determine your investment goals. Are you investing for the long term or the short term? If you are investing for the long term, you can consider stocks, mutual funds, or real estate. On the other hand, if you want to achieve a short-term goal, you can consider fixed deposits, money market funds, or bonds.
2. Know your risk tolerance
Investing involves risk, and you should know your risk tolerance before investing. Some investments are riskier than others, and you should only invest in assets that match your risk tolerance. If you are risk-averse, consider investing in fixed deposits, bonds, or money market funds. On the other hand, if you are comfortable with taking risks, you can consider investing in stocks, mutual funds, or real estate.
3. Calculate the amount of money you need
Once you’ve determined how much you can lose in an investment, calculate the cash you need to achieve your goal. In short, consider your current financial situation, income, and your expenses. To ensure you still have enough money to make ends meet, only invest the money you can afford to lose–in other words, a disposable income.
4. Assess how much you can allocate regularly
Regularly investing is one of the best ways to build wealth over time. You can start by investing a small amount regularly and increase the amount as you gain experience, for instance, a minimum of 10% of your monthly pay. You can also consider investing in a systematic investment plan (SIP) that allows you to invest a fixed amount regularly.
Beginner-friendly Instruments for Investment
How to invest your money? Consider some of these low-risk options!
1. Fixed deposit
Fixed deposits are a popular investment option for beginners because they offer low-risk and guaranteed returns. Banks and financial institutions provide fixed deposits and benefit you with a fixed rate of return for the agreed period. The interest rate on fixed deposits is usually higher than on savings accounts, making it an attractive investment option.
2. Unit trust funds
Unit trust funds are another investment option for beginners. They are professionally managed investment funds that invest in a diversified portfolio of assets such as stocks, bonds, and money market instruments. Additionally, they offer liquidity and can be suitable for investors seeking a hands-off approach to investing.
3. Government bonds
Bonds issued by the government are a low-risk investment option that offers a fixed rate of return. In other words, they provide predictable income streams through interest payments, which makes them one of the safest investment methods for beginners.
4. SME debt investment
SME debt investment offers attractive returns and low risk, making it an excellent investment option for beginners. Simultaneously, your invested money directly goes to SMEs that need financing, which ultimately helps them grow their business.
Even more practical, you can invest with Funding Societies for as little as RM100 to support small business owners. Plus, you can automate your regular investments and keep track of everything in one seamless smartphone app anytime!
Invest in Malaysia with Funding Societies
After making a thorough plan and knowing how well you can tolerate risks, consider investing your money in beginner-friendly investment options such as fixed deposits, unit trust funds, government bonds, or SME debt investment.
Funding Societies is an excellent platform should you choose to invest in SMEs, a great option for fledgling investors to earn passive income and strengthen the local economy simultaneously. So, start investing your money today and watch it grow over time!
