Investing Your Money (1)

          Investment is part of your overall financial planning. If you have some savings, you may want to invest them to maximise your return.

DIFFERENCE BETWEEN INVESTMENT AND SAVINGS
          Investment differs from savings. In savings, you will generally get back your savings, plus some interest. However, in an investment, you may or may not get back the sum invested or you may get much more than the initial amount invested. The potentially higher return is to compensate you for the higher risks undertaken by you.

PLANNING YOUR INVESTMENTS
          Smart investments are not a matter of luck, but a result of careful planning. When you invest, you should not rely on hearsay. You must spend some time understanding the market, either through research or seeking out expert advice. Below are some of the issues you should be aware:

Step 1 – Know why you want to invest
          Before you invest, you should know the purpose of your investment, that is your financial goals and objectives.

Your financial goals may be to:
o Buy a car
o Purchase a house
o Send your children for higher education
o Go for a holiday
o Plan for a comfortable retirement in the future

Your investment objectives can be either to:
o Maintain the purchasing power of the principal amount invested
o Obtain income from your investments
o Grow your net worth
o A combination of any of the above

          You can achieve your goals by investing your savings based on the time frame when these financial goals can be met.

          Also, it is important that your investment plans fit into your overall financial planning objectives to get the best possible results to achieve your financial goals.

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Source: bankinginfo.com.my