Question 1

Why should I invest?

Accepted Answer

This was a question we got very often 10-15 years back. But if you're still wondering post-Covid then here goes.

So that you maintain a healthy balance between what you spend today & what you save for tomorrow. Savings are the first step to investing. Savings when put to productive use turn into investments.

Question 2

What about the risk in investing?

Accepted Answer

From experience we've learnt 2 things about risk :
 
1. Risk comes from fear & fear stems from uncertainty or lack of knowledge. Anything new or unknown we fear & feel is risky.
2. Investments are not risky. People are.
 
Hence, higher our Financial Quotient or Intelligence (FQ), lower will be the risk in an investment.
 
FQ or FI = IQ + EQ
 
To sum up, one way to manage risk in an investment is to educate ourselves about the investment (or work with someone who is educated about it) & build our EQ as investors.

Question 3

How do I know if investing is for me?

Accepted Answer

The word 'Investing' means to infuse or endow something by committing time, effort or money.
 
How can investing then, not be for everyone.
 
Financially speaking, if you earn or can save money & if you think you may live longer than today, then investing is for you.

'The spends you forego today become the spends of tomorrow if we invest', says Rahul our founder.

Question 4

What returns can I expect from my investments?

Accepted Answer

Returns on investments is a myopic way of looking at investments. Wealth can be built even with half-decent returns if investments are made ritually over the long-term.
 
Having said that, the Indian stock market has historically clocked average annual returns of around 14% over the last 25 years that I've been investing-Rahul Kalra (founder)

Question 5

How long should I invest?

Accepted Answer

Starting now for the rest of your life. Really. Investments should be second nature for all of us. 
 
The longer we invest (or hold our investments) the more time we give compounding to work its magic. I have personally seen the inflexion magic really kick in at the 15 year mark for me-Rahul Kalra (Founder)

However, investing does not & should not supersede spending or utilising the money we've saved & invested. While investing money is a science, spending or using money can be both an art & science. A healthy balance is judicious.

Question 6

How much should I invest?

Accepted Answer

Investing Principle #2 : Invest atleast 30% of your income.

What this basically implies is that we have 70% of our income for present use & 30% for future use. That is a prudent balance to have.
 
If you start smaller, work your way up to that level.
If you can, invest more than that by all means. 
The balance between how much to spend today & how much to spend tomorrow (or in other words invest) is a rather personal metric but the baseline is 30%.

ashoonya

Shoonya is Zero | Ashoonya is Infinite

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