Risk means different things to different people in Investments. Why most people don't want to invest in market based products like Equity Mutual Funds or Stocks?One reason might be due to advertisement condition “Mutual Fund investments are subject to market risks, read the offer document carefully before investing” But unknowingly they investment in unit linked insurance plan(ULIP) which is also a market based product..We will discuss about ULIP story in another series. Coming back to few types of investment risks we face everyday 1.Market risk - it is applicable for products based on stock market. It means investment returns are impacted by market movements.It is visible day to day basis..Right? 2.Reinvestment Risk- This happens when you are trying to renew your existing FD after maturity and seeing the new rates are less comparing to existing one, which most of the senior citizen's today facing during reducing FD rates compared to 10,5,3,2 years before. 3.Inflation risk
Where to start with? This is most of the people ask when asked about investments To invest you need to have surplus money available with you to do ..So you need to create monthly surplus money from your salary or business income. If you don't have any monthly surplus then you running "paycheck to paycheck" mode which is a strong warning signal for potential future financial disaster. you need to identify needs and wants and cut some thing to create space for your monthly investments “If you buy things you do not need, soon you will have to sell things you need.”― Warren Buffett How much I can start with ? As much as you can..but minimum 15% of your monthly income for investments can be good start.As soon as soon close some liabilities you can keep increasing. Another interesting aspect is as every year our income ,expenses increase ..investments also has to be increased similar way..