How to Invest in Stocks
Stocks are an equity investment that represents part ownership in a corporation and entitles you to part of that corporation's earnings and assets. In the past, shareholders received a paper stock certificate - called a shareholder number - verifying the number of shares they owned.
Today, share ownership is usually recorded electronically, and the shares are held in street name by your brokerage firm. Investing in stocks can be tricky business. In fact, it’s best to treat all of your investment pursuits as a business. Warren Buffett’s stock market mentor is recommended, before you buy your first stock, you should master the basics of stock investing. This won’t make you a great investor overnight, but only when you understand the fundamentals of investing can you learn how to invest in stocks with confidence.
Life and Money: Why is saving important?
People generally seek instant gratification. We want everything now, right away, rather than later. Hence, it is easier to spend our money and indulge in shopping than to save money for the future. However, we should all take a step back and think about saving money before we make any impulsive purchases. We often look at saving as depriving ourselves of the gratification of purchasing the latest electronic gadget, the shiny new pair of shoes, or even a new car. Perhaps it would be helpful if we look at savings instead as deferred consumption. To put it simply, the more you save now the more you can consume later!
If the additional power to consume in the future is not a convincing reason for you to save, consider the down side of not saving. We live in a world of uncertainty. Our jobs or other sources of income are not guaranteed. Neither is our health and well-being. Hence, it is only prudent to save for the emergency situations in our lives like the unemployment or unexpected medical bills.
Furthermore, we need our savings for the big purchases and events in our lives. If you want to buy your dream house, you need to have saved enough to finance your purchase. Even if you plan to take out a home loan, you need your savings for the down payment and to pay your monthly mortgage if necessary. Saving money is also important for parents to cover the rising cost of education for their children and perhaps even for a wedding in the future.Most importantly, saving for retirement should be an important goal no matter how young you are. You may have your children or family members to take care of you during retirement but it would certainly be helpful if you have some savings to take the pressure off of them.
With a double-digit inflation in the Nepalese economy, the importance of saving has been increasing. From a rational consumer’s viewpoint, it is important that the growth of his income is greater than, or at least equal to, the rate of inflation in the economy. Holding cash in your pocket simply means that your money is losing its purchasing power. Depositing your cash in a bank account, buying bonds/debentures, buying shares, and investing in real estate may be some of the things you could opt for in Nepal’s context.
Your understanding of the importance of saving can go a long way in creating a paradigm shift in public’s attitude towards saving/investment. Your saving will not only allow you to consume more in the future and provide financial security, but will also serve as a powerful force for economic growth.