Get to know the Types of Investment and How to Invest for Beginners.

Get to know the Types of Investment and How to Invest for Beginners ! Before we further discuss the types of investments and how to invest, please note that investing is placing funds in one or more types of assets for a certain period, aiming to earn income or increase value. In simple terms, investment is one of the tools to realize our financial goals.

Everyone's financial goals are different. For example, a 25-year-old has different plans and goals than a 50-year-old.

Based on the purpose, investments are divided into long-term, medium-term, and short-term investments. Different timeframes, of course, different investment strategies and instruments.

Types of Investment Based on Purpose

Types of Investment Based on PurposeTypes of Investment Based on Purpose

Short Term Investment

Short-term investments last between less than one year to three years.

For example, a 25-year-old youth intends to get married in three years. So he needs fresh funds to organize a costly wedding.
Given this need, the youth are advised to invest in low-risk instruments because they have stable fluctuations in value and high liquidity, so they are easily converted into cash and can generate steady income. Some suggested instruments for him are deposits, money market mutual funds, or short-term government bonds.

Can this young man invest in stocks for this financial purpose? You can, but of course, it's not recommended. The reason is that stocks are instruments with high fluctuations in value in the short term. Buying stock is the same as buying a business, and business growth certainly cannot be assessed only in the short term.

Medium Term Investment

When someone has financial goals between 3 to 10 years, this can be called a medium-term investment.
For example, in the next five years, Mr. Budi must enroll his son at a well-known university in Jakarta. So Mr. Budi needs a sizable fund to pay the entrance fee and the first semester.

Given that his funding needs are more than five years, Mr. Budi can choose instruments with a slightly higher risk than deposits, money market mutual funds, or government bonds, hoping to obtain higher yields.

The instruments in question are fixed-income mutual funds (bonds), private bonds, and mixed mutual funds.

Long Term Investment

When the investment goal is over ten years, this investment is included in the long-term investment category.

These investment objectives can include children's education costs, costs of holding children's weddings, buying assets for posterity, and retirement funds.

The longer the investment period, the more flexible a person choosing the instrument. They can choose instruments with low, moderate, and high risk or instruments that cannot be converted quickly.

Some instruments that can be chosen for long-term investment include precious metals, stock mutual funds, stocks, and property.

How To Invest

Investing is not difficult, considering that information about investment instruments or market research is very easy to obtain in today's digital era. However, investment certainly cannot be done haphazardly.

Here is a good way to invest to realize our financial goals.

Make Sure We Are Financially Healthy

Before investing, ensure you have an ideal emergency fund and financial protection by having health insurance or insurance.

Planning finances for the future is very important. But never underestimate the things of concern and priority in the present.

With an ideal emergency fund, we will be able to deal with the risk of loss of income due to layoffs or economic uncertainty. Without health protection, we can also lose quite a lot of money when seeking treatment.

Set Goals First

Know the financial goals to be achieved in various periods. Call it for the short-term, medium-term, and long-term. Without clear goals, the investment process will be immeasurable.

After setting goals, also determine the funding needs to realize them. We can start the investment process after understanding the need for funds.

Get to know the Risk Profile.

Each investment instrument has different investment characteristics, and each investor has a different risk profile. The risk profile depends on a person's ability and willingness to tolerate investment risk.

Conservative investors tend to avoid instruments with high volatility, and aggressive investors are more willing to take risks because they want high returns.

The risk profile can, of course, change when one's understanding of investing begins to increase. An increased understanding of investing will increase the ability to tolerate risk.

Recognize Systematic and Non-Systematic Investment Risks

If the risk profile has a benchmark in the form of the investor's psychological condition, there is also an investment risk that investors cannot escape.

In investing, there are two types of risk, namely systematic and non-systematic. Systematic is a completely unavoidable and diversifying risk and attacks all kinds of instruments. These risks can be in the form of market risk, changes in interest rates, and inflation. Meanwhile, the non-systemic risk is stated as the risk that can still be avoided by diversifying investment instruments. These risks include business risk, liquidity risk, and lawsuit risk.

These are the things you should know before investing. Make sure you know the types, risks, and how to invest properly to achieve your financial goals.

Definition of Investment


Definition of Investment

"Investing money or capital in a company or project for the purpose of obtaining profit."

"Investment, usually in the long term for the procurement of fixed assets or purchase of shares and other securities to gain profit (investment)."


What is Investment?

Investment is the activity of placing capital in the form of money or other valuable assets into an object, institution, or a party with the hope that the investor or investor will receive a profit after a certain period of time. It is because of the hope of getting a profit at a later date that this investment is also referred to as an investment. The term investment itself comes from the Italian word, investire which means to use or use. Generally, funds or assets invested by an investor will be developed by a managing body or party. Profits from the results of the development will later be distributed to investors as a return in accordance with the provisions between the two parties.

Economically, in investing, investors will buy something that will not be used now. Something that is purchased is stored as property which after a certain period of time can experience a change in value. Investments do not always end up making a profit. There is also a risk of loss in investing. Therefore, it is very important to understand the types of investments and their risks.

Investment Purpose

Here are some important goals of investing:
  • To get steady income
  • To obtain a more decent and stable life in the future.
  • Useful for developing a business
  • Get assurance in business
  • Establish and control funds for a special interest, for example, such as social interests, expansion interests, etc.
  • Reducing inflation pressure
  • Investment can be used to maintain relations between companies
  • Participate in the development of the country.

Investment form

After knowing the types of investments, the rows of types of investments are also grouped into two different forms, namely:Real Asset Investment: This investment is made by someone either in visible or invisible forms, such as land investment, metal investment, property investment, etc.
Investment in Financial Assets: Investment in financial assets is carried out by investors as a form of security. Examples of investment deposits and stocks .

Investment Types

There are many types of investments that exist today, including:Property Investment
  • Gold Investment
  • Stock Investment
  • Mutual Fund Investment
  • Foreign Exchange Investment
  • Bond Investment
  • Sharia Investment
  • Cryptocurrency Investment
  • Deposit Investment

Types of Investment Based on Timeframe

There are two types of investments that are categorized based on their timeframe, namely:

Short-Term Investment Short-
term investment is an investment that allows you to get a profit of less than three years and you can immediately convert it to money or sell it. However, keep in mind that this short-term investment provides a smaller return so it is suitable for meeting needs in the near future. Examples of short term investments are short term bonds, stock market, certificates of deposit.

Long Term
Investments Long term investments are investments that take more than three years to generate returns. You can enjoy the results of this investment in the next five years, dozens of years, even tens of years. The returns generated by long-term investments are of course also greater than short-term investments. This type of investment is perfect for those of you who need savings for future needs such as educational expenses, funds for marriage needs, retirement funds, and so on. Examples of long-term investments are stock investments and gold investments.

How to Invest

If in the past investments required complicated administration, now investments can be made easily and inexpensively. Only armed with a smartphone , for example, you can invest through Tokopedia's investment products such as Gold and Mutual Funds . The nominal for investment can start from $ 100.

Investment Benefits

Investment also has many benefits for investors. Here are some of the benefits or advantages of investing that can be picked up:

Increasing Assets
This can be applied to property investment in buying land, apartments or houses whose prices will rise in the future. However, an increase in asset value is not obtained in a short time, it takes a long time and patience.

Meeting Future Needs
Because there are many unexpected needs in the future, investment is very appropriate as a means of meeting future needs. Investments in the present aim to support and support life in the future because the value will increase.

Frugal Lifestyle
With investment someone will try to live frugally to keep investing, in the end that person will avoid buying things that are not important and are more economical.

Avoid Debt
With a simple lifestyle, someone will avoid debt. People who have an investment commitment will avoid debt and prefer to live frugally to improve economic conditions.

Investment Risk

Besides having many benefits, investment certainly also has a number of risks that investors must be aware of.
  • Business Risk
  • Liquidity Risk
  • Financial Risk
  • Country Risk
  • Exchange Risks

Factors Affecting Investment Rate

  • There is a change in the rate or exchange rate
  • Interest rate
  • Infrastructure
  • Inflation rate

Things to Look For In Investing

If you want your investment to be successful, here are some important things you should pay attention to:
  • Do not make investments in a hurry and must be accompanied by in-depth understanding or research, including regarding the most potential investment objects to choose from.
  • Do not act speculatively.
  • It is important to consider the investment timeframe.
  • Know and assess the amount of capital that you can prepare.
  • Understand the risks that can occur as an investor and the type of investment chosen.

5 Easy Ways to Invest in Gold for Beginners

5 Easy Ways to Invest in Gold for Beginners : Already having a steady income does not mean your future is guaranteed. To guarantee that your future will be better, there is one action that should be done early, namely investment. Investing in any form must be done while you still have a steady income. There are many types of investments to choose from, from stock investments, deposits, and land, to gold. This last type is an investment choice that is on the rise during the Covid-19 pandemic. There are several ways to invest in gold that can be done.

Gold is not only popular as jewelry but is also considered a very profitable investment option. What's the article? Because gold is an item whose price tends to rise and rarely decreases in significant amounts. One example is what is happening now during the Covid-19 pandemic. The price of gold has increased significantly. Now gold i    s being hunted as an investment tool so you need to know how to invest in gold.

Because of its increasing popularity, many people are starting to switch to investing in gold. No need to worry if you are one of those who want to invest in this precious metal but don't know how to invest in gold safely. But actually how to invest in gold that is safe for beginners? Here's the review.

Invest in Gold
 Invest in Gold

A safe way to invest in gold for beginners

1. Make sure the gold investment goals

Before starting a gold investment, make sure you know what your goals are for investing. The safe way to invest in gold is to know the purpose of investing very well. Many goals can be targeted in investing in gold, whether for marriage savings, education, or retirement investments.

Or as an example, you have targeted that in the next 10 years you will stop working and start your own business. Then the income from your salary is partly set aside and invested in gold. If you already have clear goals like this, then you will know better how much gold is invested each month. That's the first safe gold investment method for beginners.

2. Monitor the development of gold prices regularly

The next way to invest in gold is to monitor gold price developments regularly. Currently, it is not difficult to monitor the development of gold prices. Many sites on the internet display the development of gold prices every day. Then there are also applications on cell phones that can display gold price developments.

What is your goal in monitoring the development of gold prices? Even though gold is known as the most stable investment tool, it sometimes experiences price declines. Even though it's rare, it never hurts to buy it. Then when suddenly the price of gold soars high, you also have the option to then sell it. However, it should be understood that gold investment should be made for a long-term type of investment, namely within 5-10 years. That's the second way of investing in gold.

3. Buy gold in a trusted place

The next way to invest in gold is to know where to buy gold. Several places sell gold bars to invest. But you should buy gold in places that sell officially and reliably. It is official, namely selling gold by including the letters and certificates because there are gold sellers who provide the precious metal in a fast way but are not accompanied by a certificate. Only gold bars.

4. Safe deposit of gold

The next way to invest in gold that is easy for beginners to follow is to pay attention to where it is stored. One of the tips or ways to invest in gold is that you also have to understand a safe place to store gold. The easiest way is to keep it at home in a safe or safety box. If you feel insecure, you can also save it in the Safe Deposit Box (SDB) offered by the bank. Of course, if you choose to use SDB, there are additional costs required. The price for using SDB is relatively dependent on each bank. For SDB itself, apart from gold, it can also be used to store goods or other securities such as house or land certificates.

5. Future focus

The next way to invest in gold is to focus on the future. You have to understand that investment is saving for the future, be it short-term or long-term, which can be 10 to 15 years. So when investing, including investing in gold, you need the patience to see the results. Gold investment is very suitable as a long-term investment so that the results will only be felt for at least the next 5-10 years. Remember, investing is different from buying and selling which aims to make a profit in a short time. Therefore, in investing in gold, you must focus on the goals and future that you want to achieve. So, focusing on the future is a gold investment method that you can apply.

Those are 5 tips and ways to invest in gold that beginners can follow. Gold is still the favorite of most Indonesians as an investment tool. So it is important for those of you who want to invest to understand how to invest in gold. As previously mentioned, one of the reasons is the price which is relatively stable and even tends to rise. Apart from the matter of price stability, there are still several advantages to investing in gold. Anything? Here's the review.

Advantages of investing in gold

1. Easy to cash

The advantage of investing in gold is that it has a high level of liquidity or is easy to liquidate. This means that gold is easy to cash into cash if at any time you need cash for certain purposes. Compared to other investments such as land or houses, of course, gold has a higher level of liquidity.

2. Protect wealth

Next is investing in gold which also means protecting wealth. This can be seen from the price which is stable and tends to increase. For example, if at any time there is inflation or an economic crisis, the price of gold tends to increase. This is very different if you only keep money in cash. When economic conditions experience inflation or an economic crisis, currency values ​​can also weaken.

Those are the two advantages of investing in gold besides price stability. After knowing how to invest in gold and the benefits, it never hurts to start investing in gold. The methods of investing in gold mentioned earlier are not difficult to implement. One thing to remember is that any form of investment is important to guarantee a better future.