Financialtreat – will explain about Confused about what what is investing ? Here’s the Answer! which you will get in the following article. let’s look at this article carefully!
Many are aware that investment is important to make from the beginning to prepare for planned and unplanned needs in the future. However, there are still many who do not know what investment they want at this time.
By making investments, you will get additional income without the need to open your own business. And here we want to provide solutions for those of you who want to invest, then don’t be confused about what investment you want at this time.
Confused About What is Investing? Here’s the Answer!
Investment is an act of investing in the resources or capital we have in the hope of getting greater returns in the future. The sooner you start investing, the greater the profit you get because of the compunding effect. And here are the investment recommendations that are suitable for you, even if you are a novice investor.
Stock
Stocks are one of the most recognized types of investment by the people of Indonesia. If you buy shares of a company listed on the Indonesia Stock Exchange, then you act as a shareholder of that company and obtain the right to a dividend of a percentage of the shares you have in that company.
In addition to the right to dividends, you can also benefit from the difference in the sale price of shares. Its liquid and easy-to-trade nature is certainly profitable for you when you want to transfer the shares to someone else when your stock price is rising.
In terms of profit, stock-type investments offer higher returns compared to other types of investments. However, with the nature of high returns, stock investment is also high-risk because the price is volatile and very dependent on certain economic, political, and circumstances such as holidays.
Mutual Funds
The definition of mutual funds can be found in Law No. 8/1995 concerning the Capital Market, which means that it is a forum use to collect funds from the investor community to be further investe in a securities portfolio by an investment manager.
In this case, you as an investor only need to provide capital which then the capital is manage by the investment manager to invest in the securities portfolio. The securities portfolio in question consists of money market products, bonds, and stocks.
Currently, starting an investment through mutual funds does not need millions of rupiah but only with a minimum of IDR 100,000, you can already choose mutual funds as your choice to invest.
Mutual funds are also classifie as a safer long-term investment compare to stocks. Mutual funds themselves have several types, namely stock, bond, and money market mutual funds.
For those of you who want to have the highest profit, you can choose a stock mutual fund. Another advantage of mutual funds is that the money you invest will be manage by an investment manager so you don’t have to bother monitoring its development every day.
Time Deposits
Opening a time deposit at the Bank is another type of investment that you can choose. These time deposits have a higher interest rate when compare to ordinary savings, and have a clear maturity date, usually 3 (three) months to 12 (twelve) months.
Where, if you disburse funds before the specifie due date, you will be subject to a penalty by the bank concerne. The longer and greater the nominal money you save as a deposit, the greater the profit you will get.
Not only that, this type of investment is also one of the investments that has low risk and is fairly safe. To make a deposit is also considere quite easy and uncomplicate, so many novice investors start their investments by opening a deposit.
Bonds (Bonds)
Bonds are medium- and long-term transferable bonds, which contain a promise from the issuer to pay compensation in the form of interest in a certain period and pay off the principal debt at a predetermine time to the bondholder. The interest reward that will be receive by bondholders is in the form of coupons.
In general, in Indonesia itself, usually this type of investment has a period ranging from 1 to 10 years. The issuance of this bond is motivate by efforts to collect funds from the public which will be use as a source of funding. In Indonesia, there are 3 known types of bonds, namely:
- Government Bonds, namely bonds in the form of government bonds issue by the Government;
- Corporate Bonds, which are debt securities issue by corporations, both private and state-owne enterprises; and
- Indonesian Retail Bonds (ORI), which are bonds issue by the Government that are sold to individuals or individuals through realtors appointe by the Government. ORI was first publishe in 2006.
By choosing bonds, you can make investments safer, because the possibility of default is very minimal, especially bonds issue by the Government. For example, if this happens, you will be given a guarantee of assets owne by the government.
Property
As we know, land and buildings are a very promising and lucrative type of long-term investment. Where, the value of the property will continue to increase from year to year and the percentage increase reaches 15-20% per year, especially if you get a strategic property location.
In addition, this type of investment is minimal risk of bankruptcy, because property itself is one of the basic needs, both for housing and business. However, choosing this type of investment means that you have to prepare a large enough fee to buy the property and maintain the property.
By owning a property of either land or building, you can rent out the property while waiting for the property value to rise, then sell it. By renting out a property, you will get a considerable benefit from passive income and your property is also better maintaine because the tenant will take care of your property.
However, make sure that you prepare a rental agreement when you are going to rent out your property to another party. This is done so that you can ask for compensation if the tenant causes damage to your property.
Gold & Precious Metals
Gold and precious metals are one of the classic types of investment that were popular among Asians from ancient times to the present. This type of investment is suitable for those of you who want a long-term investment.
Because the price of gold and precious metals will continue to increase and usually this price increase is due to the response to certain events that cause the value of paper investment, such as stocks and bonds, to decline. This makes this type of gold and precious metal investment relatively safe because of its stable price, especially when the stock market is experiencing a decline.
Read more wealth management:
ETFs Vs Mutual Funds, What are ETFs and How They Differ from Mutual Funds
Asset Management Company and Its Purpose and Benefits
Insurance
Insurance is important not only to protect your personal, but also to protect your family and also the assets you own, such as a house, vehicle, and so on. If usually insurance only serves as protection, now insurance can be use as an alternative investment.
This investment-base insurance combines 2 products, namely insurance and manage funds such as mutual funds. Generally, the premium you pay is converte into units. It is this unit that you have that will be divide into 2 types, the first to pay the cost of insurance, and the second to invest.
Insurance that is commonly use as a long-term investment is life insurance. Before buying this insurance policy, you need to correctly understand how investments in this insurance are made.
Usually this type of investment has a fairly long period of time, starting from 10 years. Every month, you are also require to make insurance payments along with the costs.
By choosing investment-based insurance, the premiums you have to pay are indeed higher than ordinary insurance products. Therefore, you must carefully choose the right insurance issuing company.
Because investing in insurance products costs more and is a long-term investment so you need to make sure that the insurance issuing company is a company that has obtained permission from the competent authority and has a good track record.
Those are some types of investments that you can use to get big profits, don’t forget to choose based on the risk you can accept!