On this blog, we have talked about what you do when you have deficit money for your financial plans: borrow. Here, we talk about what you do when you have excess money: invest.

“Investment or investing can be simply put as setting aside some money in a feasible source in expectation of a future return.”

As expected, there are many sources of investments where you can divest your excess funds into. Of course, the key factors to be looked into when selecting an investment source are; the risk and return. There is usually a positive correlation between these two factors. Higher the risk, higher the return and lower the risk, lower the return. For an example; the most popular investment source among the mass population is savings accounts or fixed deposits maintained by banks. But these sources yield comparatively less return compared to investments such as foreign currency, stocks or even real estate.

Investment will be a major component in your personal finance plan, as this is the key source of wealth multiplication. Earning a day wage and saving a portion of it in a saving account will not grant you the financial freedom that you seek. Hence, investments are a must-have in your financial plan.

Don’t worry if you don’t have a functioning knowledge on investing, we will guide you through the ABCs and more.