“There is no such thing as being too late to begin investing. Start now,” said Desi Armadiani from MaeSa Consulting Indonesia at the BTPN Investment Day event held at Menara BTPN on Wednesday (31/5).
Desi answered questions from many people about when the right time to invest is. In her view, investments can be made at any time as long as they are tailored to your financial situation. Furthermore, investing doesn’t need to involve large amounts. At present, there are a variety of products that allow you to start investing with a small amount of money.
There are a few things you should know before starting to invest. The first thing to understand is your goal in investing. Understanding the purpose of making investments is closely related to the determination of the investment time period.
For example, the purpose of investing could be to generate the funds needed for your two year old child to attend elementary school (SD). This means that you'll need those funds five years from now, so you can calculate how much you will need to invest now to adequately meet this need.
“The length of time that you wish to hold on to an investment is known as the investment horizon. Having a good understanding of the concept of an investment horizon makes it easier for you to choose suitable investment products,” Desi explained to BTPN employees attending the Investment Day event.
She added that there are some investment products that are better to be held for several years, while others offer short-term returns. Of course, every product has its own advantages and disadvantages.
Once you have a good grasp of the investment horizon, the next step is to determine the right products for you in line with your risk profile. In the world of investing, the saying ‘high risk high return’ is often heard.
Investment products certainly come with their own risks. However, we can minimize the risks that may arise by understanding the investment products that we select. Examples of investment risks include a reduction in an investment's value or difficulty in reselling an investment when you need to do so.
“You are also advised not to borrow money for investing,” Desi warned. Borrowing money for investing will reduce your profit margin because you'll be charged interest on your loan. So borrowing money to make investments adds your risk in the event of a loss.
Rather than being forced to borrow money to start investing or not investing at all because you feel you do not have enough money, starting to invest with small amounts is an option. Keep in mind that you will be investing in an institution that is supervised by the relevant authorities.
Mutual fund products are an option for investing, especially for beginners. These days, you can even start investing in mutual funds with just Rp 100 thousand. You can now use your "coffee money" to invest in mutual funds at BTPN Sinaya, the funding business unit of BTPN. By setting aside some "coffee money" every month, you can start investing.
For employees, beginning to invest can also be the start of receiving income on top of your monthly salary. When you get your annual bonus or holiday allowance are good times to buy investment products. So you should really start investing now to reap rewards in the future.