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Confused about where to start your investment journey?
Feeling Lost in the Investment World?
Shailja
November 20, 2024
In partnership with
If you're new to investing or if you're someone who prefers playing it safe, low-risk investments are a great way to dip your toes in the water without taking on too much risk.
Welcome to ThriftyOwl.Club, where we explore financial mindsets and hacks, helping you enhance your financial acumen one hoot at a time!
Are you new to the world of investing and feeling overwhelmed by the myriad of options available?
Don't worry, you're not alone! Many people, especially beginners, often shy away from investing due to perceived complexity and risk. However, several low-risk investment options can help you start your financial journey on the right foot.
Why Start Investing Early?
Before we delve into the low-risk options, let's understand the importance of starting early. The earlier you begin investing, the more time your money has to grow through the power of compound interest. Even small, regular investments can yield significant returns over the long term.
Low-Risk Investment Options for Beginners
Public Provident Fund (PPF):
Tax Benefits: PPF offers attractive tax benefits under Section 80C of the Income Tax Act.
Government-Backed: It's a government-backed scheme, that ensures safety and stability.
Fixed Returns: While the interest rate fluctuates, it provides a relatively stable return.
Lock-in Period: The 15-year lock-in period encourages long-term investment discipline.
Fixed Deposits (FDs):
Flexible Tenures: You can choose from various tenures to suit your financial goals.
Secured Investment: Your principal amount is secured, reducing the risk of loss.
Regular Interest Payments: You receive regular interest payments, providing a steady income stream.
Higher Interest Rates for Senior Citizens: Senior citizens often get preferential interest rates.
Recurring Deposits (RDs):
Systematic Savings: It's a disciplined way to save regularly.
Fixed Returns: Similar to FDs, RDs offer fixed interest rates.
Easy to Start: You can start with a small amount and increase it over time.
Financial Discipline: It promotes a habit of regular saving.
National Pension Scheme (NPS):
Retirement Planning: A long-term investment option for retirement.
Tax Benefits: Offers tax benefits under Section 80C and 80CCD(1B).
Diversified Portfolio: You can choose from various asset classes, including equity and debt.
Government Regulation: It's regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
Mutual Funds:
Professional Management: Experts manage your investments.
Diversification: You can invest in a diversified portfolio of stocks and bonds.
SIPs: Systematic Investment Plans (SIPs) allow you to invest regularly.
Variety of Funds: Choose from various funds based on your risk tolerance and goals.
Invest with the art investment platform with 23 profitable exits.
How has the art investing platform Masterworks been able to realize an individual profit for investors with each of its 23 exits to date?
Here’s an example: an exited Banksy was offered to investors at $1.039 million and internally appraised at the same value after acquisition. As Banksy’s market took off, Masterworks received an offer of $1.5 million from a private collector, resulting in 32% net annualized return for investors in the offering.
Every artwork performs differently — but with 3 illustrative sales (that were held for 1+ year), Masterworks investors realized net annualized returns of 17.6%, 17.8%, and 21.5%.
Masterworks takes care of the heavy lifting: from buying the paintings, to storing them, to selling them for you (no art experience required).
Past performance not indicative of future returns. Investing Involves Risk. See Important Disclosures at masterworks.com/cd.
Developing a Financial Mindset for Low-Risk Investments
When it comes to investing, having the right financial mindset is just as important as choosing the right products. Here are a few tips to help you cultivate a healthy investment mindset:
Be Patient: Low-risk investments generally offer steady but slow returns. Avoid the temptation of pulling out your money early—stay patient and let your investments grow.
Diversify: Don’t put all your eggs in one basket. Even with low-risk options, it's wise to spread your investments across different products to reduce risk.
Stay Informed: Keep learning about personal finance and stay updated on the latest changes in interest rates, tax laws, and investment options. This will help you make informed decisions and maximize returns.
Low-risk investments are the perfect starting point for beginners looking to grow their money without taking on too much risk. By choosing the right mix of these investments, you can build a solid financial foundation, develop a positive financial mindset, and take control of your finances.
Actionable Strategies for Successful Investing:
Set Clear Financial Goals:
Define what you want to achieve with your investments, whether it's buying a house, funding your child's education, or retiring comfortably.
Start Small and Be Consistent:
Begin with small, regular investments and gradually increase them as your income grows.
Diversify Your Portfolio:
Spread your investments across different asset classes to reduce risk.
Stay Informed:
Keep yourself updated on market trends, economic news, and investment opportunities.
Seek Professional Advice:
If you need guidance, consult with a qualified financial advisor.
Remember, patience is key. Don't expect overnight riches. Focus on long-term growth and stay disciplined in your investment approach.