Are you intending to make a long-term investment? What are your investments currently?
From the results of a survey conducted by a financial consulting service, it can be concluded that savings, deposits, gold, and insurance are the top 4 answers that are almost always encountered.
If you understand what an investment is, surely know that insurance is not an investment.
From this fact, it can be concluded that being conscious and willing to take action is not enough. You must know and understand, then you can get the maximum benefit from every fund you invest in financial products.
Investment expert Warren Buffett said that “Someone is sitting in the shade today because someone planted a tree a long time ago”.
From this sentence, it can be understood that investment is a long-term process and requires several conditions to be able to reach the goal.
Managing wealth is like managing a beautiful park. It requires a combination of fertile soil and good garden tools. Fertile land without the right tools certainly will not achieve the dream of garden products.
It’s the same with investing. Financial assets such as deposits, retail government securities, stocks, and mutual funds are tools to achieve desired financial goals.
You may want to read: Wise quotes about saving money
Three things that are often done when investing
The initial step is to list any investment assets that are currently owned.
For each asset, answer honestly how far you understand this product.
There are three possible answers:
- Product purchase because there is a financial plan that has been consulted with an independent financial planner.
- Purchase a product because it is recommended by customer service or relationship manager from a particular financial institution.
- Purchase of products because the ones selling are friends or relatives.
Come on, which one are you?
Three Important Questions before Investing
Financial expert, Prita Hapsari in her writing in Kompas Daily, advises you to be critical when deciding to buy a financial product.
Buying a product without knowing or understanding, is like driving a car with your eyes closed. Can you reach the destination? Maybe. However, the risks faced will greatly multiply.
There are three guidelines that should be asked to each of them
There are two basic reasons why a person invests. One can expect an increase in capital or expect a fairly regular cash flow.
If you are a stock investor, then, of course, expect an increase in capital from the first time you invest the same money when you sell it back.
You certainly expect stock prices to continue to rise so that the purchase price is far below the selling price.
If you are an investor who has retail government securities such as Retail Savings Bonds (SBR), then you expect periodic cash flow from SBR coupons. What if you want both?
It could happen for rental property investors or stock investors who distribute dividends.
Second, “What do I Need?”
This question must be able to answer the need to buy the product.
If the needs are short-term, saving is the best solution. If the needs are medium or long term, then investing is a wise thing.
In the financial world, the short term is usually categorized for several months to two years. While the medium-term for the next five years and the long term is the rest.
The selection of investment products should also be adjusted to the investment period.
The easiest example is children’s education funds. If a child will enter a certain level of education (high school) within one year, then term savings is a wise choice. Parents need stable investment returns because money will be spent in the short term
Meanwhile, if a child enters secondary education within 10 years, the use of term savings has the potential to provide returns that will be inferior to the inflation rate.
A better investment alternative is stock-based mutual funds or direct stock investment.
Third, “How Much do I Get?”
Financial advisers often advise all investors to always be critical of the potential returns of each product purchased.
You should be wary if you offer a product whose yield is far above average because there is a possibility that the offer is fraud under the guise of Investment.
For information, at this time, you can expect returns of around 2-5 percent a year for cash assets such as deposits (select sharia ones), between 5 percent and 8 percent a year for retail government securities, and above 10 percent a year for mutual funds stock.
The potential return on investment in direct shares can be pegged up to 15 percent, even more, but requires carefulness in choosing the company’s shares.
After answering the three questions above, you will realize that investing money from work with an understanding of each other’s needs is a very wise step.
You will better understand how the money works and which investment decisions will help achieve what is dreamed of and what is not.
No one is more responsible for the fortune sustained than yourself.
Finally, my advice for you, choose sharia-based investment so that you can experience the benefits of the world and the hereafter.
Live your best life!
Source: Prita Hapsari Ghozie – Kompas Daily