What’s Your Purpose Behind Investing?

The right investment for achieving the stipulated purpose is quite challenging. What you need is focusing on your goal and monitoring every step taken. We will talk about the common proposes why people invest and investment options appropriate for them.

Fulfilment of Financial Targets

The foremost step is to set your financial targets or goals. For their fulfilment don’t just rely on long term investment, rather blend it with short term investment instruments. Taking an example, if you want to gift a bike to your son on his birthday, then it’s beneficial if you go for short term investment.

The pattern of investment changes with the desired goals. So set a goal first and then decide upon the investment accordingly. Also, decide upon the financial instrument, you want to fulfil your set target with, as there are many investment alternatives. Those, who prefer high returns rather than fixed interest income over a stipulated period of time, then they can go for riskier options such as growth stocks, shorting etc.

Investing for Retiring Rich

Retirement is one of the common reasons, people plan their investment for. The uncertainty associated with the sustenance of the pension system over the coming time period makes one investing for the same. Also, inflation is also one of the major reasons for planning retirement investment. In the scenarios, where your pension can get ceased or reduced due to certain reforms then retirement investment proves helpful to you. It is a long-term investment, in which majority of your capital is tied to the investment. Retirement portfolios contains blend of stocks, debt securities, index funds and other money market instruments. As the age of the investor progresses, the portfolio is altered with low-risk securities so as to ensure adequate returns.

Reasons for a Big “No-No” to Investing in Stocks

After discussing about the purposes to invest, now we will talk about the two major reasons that forbade investing.

Not having proper Knowledge

When you are not acquainted with the investment instruments thoroughly, then its better not to pool your money here and there, as it can ruin your investment. Unless you have sufficient knowledge about investing, don’t just throw your money chaotically. Take every move cautiously so as to make your investment productive.

Need to Get Out of Debt First

In case, you are already due with your debt payment, then in such a scenario, employ your surplus earnings in relieving off the borrowing. Let’s take an example. Suppose you have taken a $1500 loan at 9% interest and you get an increase in your salary worth the same amount, then instead investing the additional amount in other ventures, pay off the debt with the same. Investing in other sources could be beneficial if the return is equal or more to the interest amount of debt, which is not certain that you would get.

Conclusion Investment goals changes with the changes circumstances. So, watching out for every investment option available according to your purpose is the key. Keep altering your investment with your changing purposes. Otherwise, an investment with no purpose will be a failed one. But, having adequate knowledge about investing and investment tools will serve the purpose.

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