best investment

What is investing? | Fundamental principles of investing | Investing habit

Finance for an individual starts from managing personal finance. Personal finance is all about saving for the future, irrespective of your monthly income. You can neither become wealthy nor financially independent if your spending is equal to or greater than your earnings. 

Investing is not difficult to understand, but not easy to practice. Investing is regularly saving some money and putting it into appreciating assets.

Objective of investing

You should know why you are saving. A habit of saving is difficult. There should be a strong desire and purpose to save. Purpose like a new home or bigger home, car, education of kids, the marriage of kids, medical emergency, social obligations, comfortable post-retirement life etc. may be motivating factors for you to save regularly.

Investment habits

The habit of regular saving is problematic because it challenges our human nature to spend and satisfy our needs or wants as early as possible. You must have a habit of saving and investing for financial independence and peace of mind. It is even better to teach about healthy investment habits to children, which will go a long way in the future.


Needs vs wants

Basic needs are food, clothes and shelter. Beyond these, spending may be categorised as wants. For example, some WANTS are having a costly TV or a luxury vacation. You may like to fulfil your needs first and delay or postpone your wants for some future goals.


Best investment product

Once you are motivated enough to save regularly. The next challenging question is where to invest? Whom to trust? Whose advice will be beneficial? There are many articles, videos etc. available for guiding you in the matters of investing. However, you should learn basic finance to make informed decisions. When discussing your financial goals and needs with your family, your banker or your relationship manager,  your basic knowledge of finance will help you. And,  nobody can fool you and sell you unsuited financial products. 

There are numerous financial products and investment options in the market, from simple fixed deposits to complex cryptocurrencies. The most popular financial products for investing are:-

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