India is a country with the majority of average middle-class people.
Here people are trying to maintain their financial position. Or, some people are working their day off to gain a stable income.
No one is trying to push up the ladder and climb towards wealth maximization, but everyone does dream of such life.
This is because there is extreme competition in every field of occupation that, a huge number of people suffer dejection and surrender.
But this needs to be changed.
Your assured salary is not the only way of income you can look forward to.
There is a term called investment or more specifically ‘share market’ that can help you go beyond the boundaries and achieve wealth eventually.
However, I am sure you are taken aback by the word “share market”.
People have a huge misconception about this infamous term. They simply presume that share market directly relates to fraud or loss of money.
Which is not true! The truth is that share market is a risky platform indeed. You may lose some amount of your money here.
But, hear me out! You “may” doesn’t mean you will necessarily lose all your investment here.
This tragedy will only happen when you invest in wrong stocks/ make a wrong transaction or the market suffers bad condition.
The first thing you should do is to know about the basics share market. There are multiple tutorials available online to help you with that. This will cut down your risk to a great extent.
The other point here is that people get overly exited after investing once. Share market demands patience.
You need to give at least five years to gain good returns on your invested amount.
You cannot become a multimillionaire or RK Jhunjhunwala overnight. Likewise, you need to give time and adopt good investing habits.
The next query in people’s mind is whether an average salaried person can invest in stocks or not?
The answer is that anyone who can spare 500 each month can invest in stocks.
People have believed it from decades that only men in black or elites can invest in stock.
No!
You, a person who saves 100 or 1000 from monthly income for emergencies can also invest here.
You do not need to ride luxurious cars, spend day in AC cabins and meet rich people to step in share market.
You can ride an average car, live in a 2BHK and work your days off yet invest in Ambani’s or Adani’s company.
A person can invest as low as 500 (an ideal minimum amount) and as high as they wish to in the stock market.
So, now that it is clear that this market is for everyone, and you should invest in stocks the next question is how?
How can I invest in stocks with little money?
Well, here are some points to look into that will make your investing a happy experience.
Also Read: Complete Guide of Demat Account and Trading Account
1. Planning
The first thing you need to do is asses the objective of your investment.
Why are you stepping in the share market? Is it to maximize your wealth(obvious)? But why?
How do you plan on using the fund?
A person can have several objectives to start investing.
The goal can be self investment or family investment. Buying a house, education, retirement plans, travelling and touring can be some major objectives.
So decide on an end goal. This will help you lay the foundation of your investment portfolio.
2. Risk appetite
Since, we all know that stock is not a risk-free zone, there are risks present in the market to maybe sink your money as well.
So, what you should do here is to assess how much risk you can absorb and chose an investing vehicle based on it.
Some instruments of investment are highly risk-prone. You should be able to identify those and do not get into risky ventures as a noob at all.
Also choose popular stocks, they are less risk-prone.
3. Time period
How long do you want to engage your fund in the market? 5years? 7 years? Or 25 years?
The longer you invest your money the higher the returns will be.
But of course, you can choose to withdraw your fund as per your wish and liquidity of the investing vehicle.
However, at lest 5 years is an ideal period to attain good returns on your investment.
4. Diversification
Do not! Never! Invest all your funds in just one stock. Always diversify the risk and return.
A person should at least invest in 8 different types of stock.
This way even if one of your stock goes bad, others will cover up for it.
5. Disciplined investing
Doesn’t matter that you begin to invest with 500 or 5000, you should have a healthy investing habit.
SIP is the best method to invest in stocks as it lets you make monthly investment rather than the lump sump amount.
6. Have control
You should have a good control over your emotions.
A good return and quick earning can excite you and encourage you to make mistakes or take more risks. Be wary of such periods.
Use your brain and not your feelings to play on the safe side.
The Bottom Line
The stock market is a place where anyone can dream to achieve their financial goal.
With risk appetite, patience and knowledge you can dream to attain financial freedom and achieve it as well.
You just need to open a Demat account with SEBI certified DP and start investing today.
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