The investment sector fuels the overall economic growth of any country. The investment sector itself depends upon two very important factors. Investments made by business establishments and by the private or household investors. In the past few decades, the significance of the private investors has grown drastically and the investment instruments are increasingly becoming private investor-centric. Individuals too emphasize a great deal on personal investing and it no longer takes a backseat for them.

Personal Investing An Abstract

Personal investing refers to investments made by a household or domestic investor. Usually, such investors invest certain portion of their savings in various investment instruments to attain additional income. The extent of investment is small and investors are looking mainly to acquire growth without taking too many risks. Individuals undertake investments in order to make sufficient arrangements for their future, especially after retirement from their work. Usually small investors prefer to invest in securities like stocks, bonds, mutual funds and commercial papers. The peak of personal investment is when the investor invests in any real estate. Property investing is relatively difficult and a costlier affair and not always possible for the average investor.

Personal investment has attained a supreme position in the economic life of an individual. Every individual longs to have sufficient economic growth in his life and investments are one of the most prominent sources to achieve economic growth. Investments also allow the investors to escape the tax net and save a sizeable portion of their income. Hence, to attain all these goals, personal investments are imperative. Real estate investments can provide a considerable amount of income in the long run especially if the individual gives his property on rent or on a lease. There are a large number of investment companies that focus on personal investment advises and personal investment management. Individuals from all income levels can make investments according to their income.

Personal Investing Plan:

To enjoy maximum returns from the investments, investors must chalk out a systematic plan for themselves. They must decide exactly how much and in which companies to invest so as to gain the best returns. For this, domestic investors are advised to follow the following principles for preparing a definite investment plan:

1) The best industries for small investors to invest in are communications, wireless, satellite and software industries.

2) It is essential for the investors to invest in schemes that offer tax benefits. Investor must seek to maximize their tax benefits.

3) Though real estate investments are a bit expensive to begin with, they provide the best returns in the future. If the investors can fund property investments then it is the best investment they can undertake. Investors can then give the property on lease, preferably to a commercial establishment for higher returns. Individuals must try and re-invest the revenue earned from the rent or lease of the property.

4) Investors must invest in low-risk investments to a greater extent. Even if the interest rate is low, individuals must take up risk that they can sustain.

5) Individuals must diversify their investments and not focus on only one company or industry. This would spread the risk and returns of the individual that is extremely beneficial.

6) It is important that the investors start investing in the securities market since an early stage. This would help the investors is maximizing their returns.

7) Investors must plan and invest proportionately in long-term and short-term investment instruments. Among the two, the long-term investments must be greater than the short-term investments.

8) Individuals must plan their monthly expenditure accordingly so as to undertake the necessary investments. Even if they are required to cut down on their expenses to some extent they must not refrain from it.

Types of Personal Investment:

Individuals can invest in various types of investment instruments to ensure personal growth. Some of the major types of personal investment instruments are as follows:

1) Stock Market: The mot common form of individual investments is in securities. Investors usually prefer to invest in company stocks, bonds and mutual funds to a limited extent. This way they can enjoy the benefits of the growth of the companies and the overall boom in the market. As the companies increase their profits the investors too get increasing share through the medium of greater dividends. Investors must ensure that they do not invest in securities only on the basis of high rate of returns. They must identify the risks involved in the security purchase and then decide about the purchase.

2) Retirement Schemes: The retirement schemes allow the investor to make arrangements for future income, especially for period after the retirement. Individuals need to make provisions for their pensions and have a source of steady income during their retirement days. There are various retirement schemes initiated by agencies like the employers, government, insurance companies ad other banks and financial institutions.

3) Insurance Policies: Insurance is a mandatory feature for every individual. It is mainly a risk management tool and is a protective shield against major losses like life loss, serious accidents, and medical insurance policies and against major financial losses. Investors need to pay regular premiums towards each of these policies. Insurance policies are valid only in accidental conditions. The investors can claim the losses only when the loss is caused due to a mishap. The amount of premium depends upon factors like the total value of the policy, the age and health condition of the investor. The policyholder can also provide cover to other member of his family along with his policy.

4) Real Estate Investment: Real estate investments refer to purchase of properties like apartments, studios, homes, resorts and even plain land. Individuals must aim to purchase properties in prime areas or up coming areas in order to maximize their returns in the long run. Investors must identify the potential of a place while they make the property investments.

Investments have become mandatory for all individuals, especially those seeking high growth. Household investors need to take special care while investing their money in order to minimize their losses. Personal investment is a tool that can create a significant capital base for the investor in a relatively quick time.