In an effort to meet their needs, everyone needs financial income. Of course, that income comes from income while working. The income is then allocated to pay for any existing needs. However, in using the money, it cannot be done with the origin but must be with proper financial management. One must be able to distinguish what is a need and what is not. So, make sure that the use of finance is prioritized first on meeting needs. In terms of managing finances, apart from only meeting current needs, it can also be set aside for future needs. One of the financial preparations apart from savings and emergency funds is an investment.
1. Then, what is the investment?
Investment is an activity to invest or fund in the hope of getting profits or returns in the future. Investment can also be interpreted as an activity to invest other valuable assets in an instrument and within a certain period of time. Meanwhile, according to the Big Indonesian Dictionary (KBBI), investment is the investment of money or capital in a company or project for the purpose of making a profit. So in conclusion, the notion of investment is an effort to develop money or other valuable assets within a certain period of time in order to gain profits in the future.
Talking about the investment, nowadays it is not only done by certain people. Instead, it has become an opportunity for many people, including the millennial generation. At present, many millennials have tried to learn about investing in order to plan for their future. Of course, this is very good because financially for the future has been thought of since a young age. This is a very good condition to start investing. The long term investment is the best investment. This is because the longer the time we invest, the better the returns we will get.
2. How to start investing?
The first step to start investing is to understand first how much income and what our needs are. Make sure that your current needs are a top priority, before deciding to set aside for investment (determine your investment budget per month on a constant and consistent basis). In addition, one of the important things that must be considered is, to choose an investment instrument that makes sense, not to enter into a fraudulent investment.
3. How to set up funds for investment allocation
In financial planning, there is a formula for making the allocation of funds, namely the formula 40, 30, 20, 10. What is it? The number formula is a breakdown of the financial division based on its use. The details are as follows:
40%: daily necessities
30% maximum: installment payment
20% minimum: investment
10% : charity
However, if we do not have instalments, then the 30% fund can be allocated into two elements of need and investment.
4. High risk, high return. Low risk, low return!
Statement High risk, high return. Low risk, and low return seems to always be related when we talk about investment. That is, investments that provide high returns or returns, of course, are also high risk. Because in essence, investment and risk are like two sides of a coin. There is no investment without risk. Or rather, there is nothing in this world that is not risky. Every time we make a choice, of course, there will be impacts and risks. The difference may be the level of risk, there are low, medium, and high. Well, in this case, if there is an investment offer that produces a large return, but without any risk at all? Of course not! It could be a fraudulent or fraudulent investment.
5. Types of investment instruments
Basically, investment instruments are divided into 2 types, namely debt instruments and ownership instruments.