Travelling can teach you a lot of life lessons, as we travel we become wiser. While traveling we learn about the lives of people who live in conditions different from ours, but the most important are the things we learn about ourselves. While traveling we have a chance to introspect our lives, we understand what we need to change and what needs more time and attention.
Apart from some obvious lessons, traveling can also teach us about handling our finances and also about investment. Investments are very important as they are a way of securing our future finances, a way of paying our future self. There are many books and articles written about the importance of investment and its benefits. The perfect time to start investing is in your 20s but even if you’re older it’s fine, better late than never.
Methods of Investment
There are several methods of investment, you can choose the one that suits you but ideally, you should invest in 2 or 3 different types. A method of investment should be chosen based on liquidity and rate of return. On average inflation increases by 3-5% annually, therefore, the buying capacity of cash decreases every year this makes it important that we invest in such a way that our rate of return is more than inflation. Here is a list of different ways in which you can invest and the pros and cons of them:
- Real Estate– This is one of the oldest known means of investment and is very popular to date. You can invest in land or buy a house, real estate prices are always on a rise in a general scenario but you won’t always make an immediate profit out of the real estate. With traveling made easy in the modern-day you can also buy property in faraway places. If you buy a house you have to rent it out to get an income or if you buy land you have to make use of it to earn something, or if you’re in need of a big amount of money you can sell your property but the prices increase in long term only and in short term they are subject to the ups and downs of prices. One con of real estate is that it has low liquidity, if you need to sell the property it will take some time till you find the right buyer and finish the paperwork. Real estate is a very good investment for the long term because the prices of the property eventually increase.
- Share market– The share market is a very good place for investment, though it is subject to market risk there is always going to be some risk no matter where we put our money. The best part about investing in the share market is that we can start with the smallest amount of money, even ten rupees so we don’t have to wait till we collect a lump sum to invest. The rate of return in the share market is very good, sometimes even 100% but it depends on the shares that you choose, if you can’t study the market then you can get professional help. Shares also have good liquidity as you sell the shares in a minute and in two working days you can transfer the amount to your account.
- Gold– Gold is very good not as jewelry but as stocks, we can buy its stocks from the commodity market, its liquidity is just like the share market investment. The annual rate of return of gold is 10% and in 2020 it neared 20% which makes a good investment and also a safe one since there’s not as much movement in the commodity market as in the equity stock market.
- Business– investing in a business of someone else or your own is a good investment but its rate of return and liquidity will depend on the type of business that you’re investing in. Even if the business isn’t in your area you can invest in distant businesses and travel till there every now and then.
If you’re looking to invest abroad then you can do so by buying shares in a foreign stock exchange or buying real estate abroad or by investing in their business. You can just go visit the site of business once in a while without much hassle since most places are easily connected by flights. Foreign investments are always welcome in most countries and governments even have policies that would benefit the investors so that there is more foreign investment in the country.
Investing is a way of securing our future financially and you should invest even if you don’t have a huge amount of money. We must remember that the right kind of investment is an asset.