You want to get started with this investing. A penny saved is a penny earned. We all know this is true, so try to follow it as much as possible. You might have a bit of money saved. It’s probably not enough for a house, but you wanted it, and you should probably invest this in something. Maybe you’ve heard on the news about the stock of Wipro, Mrf, or Infosys and how, if you’d invested 20 years ago in Wipro, you’d be a millionaire by now or something like that. But if you’re new to this whole investment thing, it can seem like a complicated black box. Like, how do you even buy stock? What even is a stock?
In early times when there were no well-planned investment models. Now we have plenty of options to make sure that the saved penny multiplies and grows.
If you are a young professional still contemplating your investment preferences, here are a few tips for you, If you are a young professional still contemplating your investment preferences, First and foremost, do not put off investing for another day when you will have that ‘surplus cash’ on hand. That day might take forever to arrive; so, don’t delay and start right away. First, we talk about asset classes? What is it? what is an asset? In early times when there were no well-planned investment models. Now we have plenty of options to make sure that the saved penny multiplies and grows.
What is an Asset ?
In simpler terms we can say that “Anything that hold value”. In other words, An asset is something containing economic value or future benefit. An asset can generate cash flows in the future
Car is an asset or what?
Answer: – No -Why? -It is a consumption! It is an asset from the counting point of view. But practically we see that the car is on the roads. Then its 25% has been already depreciated. If you go to sell, you won’t get the same price. So already there is a depreciation cost. Then every day the car is losing its value. So for me, the car is a consumption item. It is not an asset.
Home is an asset or not ?
Answer :- It is an asset. You eventually stay there. It provide social securities. It has the potential to give you future returns.
What is an Asset Classes?
Answer :-An asset class is a collection of securities, comparable traits and goes through similar market fluctuations, Risk, returns, liquidity, taxation, volatility, tenure differ for every asset class. Hence, investors believe in asset category diversification to earn maximum returns with minimal costs.
Types | Categories of Asset Classes
a) Fixed income
As the most popular among Indians, the fixed-income asset class is one of the most trusted and oldest forms of investment. Fixed income means, I will get fixed returns on this. So, recurring deposits, fixed deposits, debt funds, bonds, and fixed multiple instruments are issued by the government. Like, Public Provident Fund scheme(PPF), VPF, National Saving Schemes, National Savings Certificate, Pradhan Mantri Yojana, and Sukanya Yojana, there are different yojanas that are part of government schemes.
What is the recurring deposit? You have decided that this much money I will put every month then that’s fixed recurring which will increase slowly.
Like fixed deposit for which Axis bank is a bank whose FD’s rate for 5 years is 5.75% this means that if you are investing in Axis bank’s FD then you will get 5.75% interest. What is inflation right now? Inflation is around 5.5-6% which is bookish inflation. It provides money securities and steady returns. It is not to generate massive wealth gain.
b) Cash and cash equivalent
These are also known as Money market instruments. Cash can be cash, coins, cheques, in any form but it’s a hard liquid instrument available to you that protects you and allows you to grab the opportunity. Cash equivalents Like saving accounts, commercial papers, treasury bills, etc. are highly liquid instruments with a maturity of up to 1 year. They are highly liquidating and easily accessible.
c) Equities
Equity as you know is the most exciting asset class because it has the potential to give you exciting returns. It has gained popularity in the past few years. Equity means businesses- when you purchase equity or stock of any company. So, it means you have a purchase percentage of ownership. You can invest in equity through Mutual funds, Etf, Index Funds and Stocks.
There are 1750 companies listed in NSE and 5000 in BSE. But, around 2000 companies that will have liquidity. Do you know there are 22Lacs MSME in India? Meaning medium and small enterprise. And there are many companies that are unlisted and will be listed soon. So, equity investment is not about investing in listed companies. You can invest in unlisted companies as well.
d) Real Estate
The real estate asset class, mainly focuses on apartments,plots, commercial buildings, industrial areas, villas etc. Many people has witnessed a growing interest in real estate investments, exacerbated by the launch of Pradhan mantri aavas yojana i.e. house for all scheme. This is not just in urban areas, but in semi-urban and rural regions too. Nowadays, such products have come in financial assets that are a proxy to real estate like real estate investment trust(REIT), INVIT, infrastructure investment trust. It’s not a fixed-income product. Neither is a pure equity product. But it is that you are participating in the real estate developing process.There is another way to participate in real estate stocks that work in real estate. Buy that stock if you want.
e) Commodities
Commodities are often anything from goods, properties, or products that will be traded for various purposes. Gold, silver, bronze, food crops, petroleum, etc. are some examples of commodities under the asset class, and therefore the market undercurrents vary for every. the worth can rise or fall as per the demand. Merchandises aren’t meant for long-term investments unless it’s gold or silver. Just buy when the costs are down and sell when the costs go up.
f) Alternative Investment
It consists of cryptocurrencies, NFT is a non-fundable token basically it’s a digital asset that you own against anything. It could be a photograph, an asset, essay. It could be anything. You might have heard Amitabh Bachhan making NFT of his signature. and he sold. -Like a piece of art. It can be anything that can have a digital presence that can be converted as an NFT.
ALTcoin which is a proxy of cryptocurrency, then private equities, VCs, hedge funds, startups. These all are alternate investments that have high risk but the potential to generate high returns
The first step in account finalization involves reconciling accounts to ensure that internal records align with external statements, such as bank statements and vendor invoices. This process helps identify discrepancies, errors, or missing transactions that need to be addressed before finalizing the accounts.
Reconciliation of accounts involves comparing the financial records maintained by the company with external documents, such as bank statements, vendor invoices, and customer receipts. The goal is to ensure that there are no discrepancies between the two sets of records and to identify any errors or missing transactions that need to be rectified.