Best Ways To Start Investing With Little Money
All of you think that investing in stock market required lot of money – to start investing in stock market required lack of rupees that’s one of the reasons in India why still only 2% of tax payer or income holder has investment in stock market.
Today will discussed about how to invest in stock market with little money?
Saving money and investment is like connecting train and Buggy. Without saving you can’t be regular investing in stock market. So 1st plan how to save from your income. Best way to use Cookie Jar Approach. Daily to start with 10 Rs to 100 Rs side in one Cookie Jar for future investment.
You can start recurring in your saving account on monthly basis after that. Bank will pay you 3 – 4% annually for your saving. But keep in mind bank interest never beat inflation so you should invest in stock market to beat inflation in longer run.
#1 Open Account with broker who offers you Direct Investment?
Open Account with Broker who offer you direct investment option in mutual fund. With little saving you can invest in stock market with way of mutual fund. Investment in Mutual fund I best way to fight with Inflation as well as create wealth. But very few person know that Mutual has two types one is Direct investment Mutual Fund and 2nd is Indirect investment Mutual fund. Both plan manage by same Fund manager and same fund house but both plan NAV is different because Direct plan is more or less low cost then indirect plan due to commission pass on indirect mutual fund plans.
Very few Broker offer Direct Investment Option in Mutual fund. Zerodha Coin is one of the ways you invest in direct mutual fund scheme.
Benefits of Direct Mutual Fund Scheme
- Saving up to 1.5 – 2% on commission on your value.
- Highest NAV compare to indirect plan.
- Easy to buy and manage your portfolio
- Easy SIP– start, stop, modify anytime you want.
- NAV tracking orders. Similar to stocks, place orders to purchase or redeem funds based on NAV.
- Mutual Fund in your Demat account you can take loan against on it.
- MF or stocks at demat are a lot simpler to maintain by dependents (nominee of Demat) in the event of death. Immediate plans with numerous AMC’s would imply Numerous folios, hard to aggregate and maintain
- Investment directly from your mobile. Zerodha Coin Mobile App – IOS & Android.
#2 Open Account National Pension Scheme
Pension plans provide financial security and stability during old age after retirements when people don’t have a regular source of income. Pension scheme gives an opportunity to invest and accumulate savings and get lump sum amount as regular income through annuity plan on retirement.
To provide social security to more citizens the Government of India has started the National Pension System. To invest regularly you can secure your retirement. NPS also invest in stock market but in secure manner.
Benefits of NPS
Some of the benefits of the National Pension System (NPS) are:
- It is regulated – NPS is regulated by Pension Fund Regulatory and Development Authority, with transparent investment norms & regular monitoring and performance review of fund managers by NPS Trust.
- It is transparent – NPS is transparent and cost effective system wherein the pension contributions are invested in the pension fund schemes and the employee will be able to know the value of the investment on day to day basis.
- It is simple – All the subscriber has to do, is to open an account with his/her nodal office and get a Permanent Retirement Account Number (PRAN).
- It is portable – Each employee is identified by a unique number and has a separate PRAN which is portable i.e., will remain same even if an employee gets transferred to any other office.
#3 Mutual Fund Account – Investment with SIP
Popularity of Mutual fund Systematic Investment Plans (SIP) has gone up in the last few years. Amfi’s Mutual Fund Sahi Hai campaign also helped popularising the concept of SIP and mutual funds. SIP is one of the best tool to create wealth for future. However, many investors, including those who have already made SIP investments in mutual funds, are often confused about SIPs.
An SIP is a tool that helps you to invest regularly in a mutual fund schemes, mostly in equity mutual fund schemes. Most mutual fund advisors do not recommend investing a lumpsum in equity mutual funds. SIP is a convenient tool for salaried investors to regularly invest in mutual funds.
Benefit of SIP
- Lowest Locking Period
- Best way to Invest periodically
- Power of Compounding
- Rupees cost Averaging.
- Disciplined Saving
- Flexibility of Investment amount
- Tax benefit in ELSS Mutual Fund Investment
- Higher returned then recurring deposit
#4 Direct Investment Account – ESIP
ESIP means you can chose of selected stock bunch or ETFs and directly invest with help of your investment account with Broker. You can create your own portfolio in ESIP.
With Equity SIP you can invest systematically and in a disciplined manner for collection of one or more stocks or Exchange Traded Funds (ETFs) and has a common trigger date and frequency in a single SIP. It allows you to invest in stocks or ETFs by making periodic investments (Daily, Weekly, Fortnightly and Monthly).
For e.g. Equity SIP allows you to pay 12 periodic investments of Rs. 2,000/- per month instead of one-time investment of Rs. 24,000/- for collection of stocks or ETFs.
Benefits of ESIP
- Direct investment in market
- Systematic investment
- No fund management fees
- Direct control over your portfolio
- Increased or decreased Investment amount as per your choice.
- Withdraw your portfolio without any locking period.
Chose Right Stock Broker:
Selection of Stock Broker for beginner is very important Chose Broker who offer Zero delivery brokerage account and Direct Mutual Fund Investment Option.
Select Right Stock Broker for Beginner
Open a free demat account with India’s Leading Stock Broker in 10 Mins
Zerodha – leading discount stock broker offer lowest brokerage and zero delivery brokerage for their client. Open account in 10 mins with help of Aadhar Number.
Which is the best Demat Account for Beginners & Small Investors?