Baby steps of Investing
What does it actually take to be an Investor? Of course, the definition revolves around a person or an organization putting certain capital on a financial scheme to bag in profit but like many other professional activities, investing also contains many aspects to it. Here, I will mostly be covering the baby steps to enter this domain that personally worked for me along with certain ways people could invest.
There aren’t absolute starting points when it comes to investing. Anybody can begin their investing career as long as they are well aware about the business that they are getting involved in. However, there are crucial requirements one must be wary about. The first and obvious requirement is money. As the major focus of the blog is to build an entry gate towards the world of investing, let’s assume that we already have a certain amount of money saved in our bank account. Now this is the trickiest phase because there are millions of places where we can invest from the share market to real estate or even startups. It all depends on the investing style of an individual and these styles depend on factors such as the capital amount (capital=money), time, risk and reward ratio etc. Some passively invest whereas some do it for an active income. Some invest with a long-term vision whereas some acquire money in a short period of time. Figuring out what best works for us is the first yet everlasting step in this field as there is a constant need to adapt to the market.
As sweet as many people make it sound, risks and constant pressures are the immediate attachments that come with investing. Risk is the crucial entity to keep into consideration before making any moves. Some questions that must be entertained are ‘How much should I invest?’, ‘Will I be able to sustain when I lose the money?’, ‘What is the profit for?’, ‘Are my emotions strong enough to withhold any sort of pressure?’ etc. The level of risk one takes significantly depends on the answers of these questions. In general, more risk means more reward, however the likelihood of this vague theory to be practical is when all the dots are properly connected beforehand. The most important tool for connecting such dots is proper research which in fact converts a risk into a calculated one. An eagle eye view of the area we are investing in will allow us to contemplate a good judgement to utilize our saved money to generate rewards. Furthermore, a good sense of emotional intelligence is also as equally important as research. If research enables us to draft the perfect walkthrough of investing then emotional intelligence prevents us from making reckless moves. It allows us to have our own contemplation on the matter without letting negativity or even sweet yet ulterior words of people. We should never forget that investing is a real professional activity that requires as much focus as we give to other professional activities regardless of the size of our investment; calculated risks, research and emotional intelligence being its foundation.
Points presented till now were some of the abstract steps. Now we move onto concrete steps that would answer common ‘how’ questions. We find investment opportunities everywhere. The most conventional place is from other people’s word so the next time you are sitting beside an investor who may be a family member or colleague or anybody you are directly or indirectly associated with, talk to them about investing. Ask them questions about their style of investing and eventually amidst these conversations, you will find an open door. My aunt used to invest in the share market. Out of curiosity, I asked her about how she earns by investing in it and eventually I made my own DEMAT account in the same broker as hers and after just a span of a few months, I started to invest and I have been investing since then. Of course, there were many hours of learning in between but a small conversation is what sparked it all. In a similar manner, you could find many insights about real estate(property consisting of land or buildings) or other businesses however there are differences between share market and these investments as share market is a system whereas any other investments has mostly to do with getting involved with other people that is why soft skills such as communication, leadership etc. plays a huge role.
Once I was in this restaurant hanging out with people that I met on Rotaract and we were gossiping about random topics. Then eventually we were talking about how profitable mask business was at the moment due to covid-19 and that’s when one of the people there shared his involvement in a similar type of business. I continued to ask him questions as I was extremely interested. After a good conversation about it, we exchanged numbers and I asked him to approach me if similar opportunities come striking his way. At the time, it seemed like a casual request, however just after a few days he approached me with a deal and after various speculations from my side, I invested in it. I received my money back with expected profit after 36 days even though it was a month-long deal; however, I still earned a reward from it. My research on the opportunity is what gave me confidence to give away my money and my emotional strength allowed me to be patient even when he returned my money 6 days late. As I mentioned, we find investment opportunities anywhere; starting a casual conversation with people from such a community is how we discover them.
So, do I believe that people should invest? Absolutely! Take this blog as your sign to begin your investing career but always be cautious; always form a contract and critically think before trusting anybody. But except that, I hope you find your balance in this aspect so that it could compliment you in your regular life.
Written By: Sunil shahi ( Bachelor of Computer Applications)