Choosing to start the best investment is the right decision. Moreover, the investment trend in recent years has become increasingly popular, especially by the millennial generation. By allocating some of our wealth through investment, it will help fulfill our needs in the future. There are several types of investments that are in high demand, ranging from stocks, mutual funds, to deposits. However, do you know what are the best types of investments that have minimal risk, as well as tips on investing safely for beginners? Take it easy, this article will discuss these two points for you. So, see the discussion until the end!
What is Investment?
Before discussing further about the best and profitable types of investment for beginners, KH pals need to first understand what investment is. Investment is one of the strategic factors in economic activity. Reporting from detikfinance, investment is the activity of investing money or capital (valuable assets) for the purpose of making a profit. Meanwhile, according to the Financial Services Authority (OJK), investment is an investment that is usually made for the long term by buying all assets or shares and property rights in the hope of getting a profit. Anyone can start investing. Parties or people who make investments are called investors. Investments are classified into two, namely individual investors and institutional investors which usually consist of bodies, companies, or institutions. The importance of investing is not necessarily for financial gain alone. By investing, we can improve our self-management in managing our finances well.
Best and Profitable Investment Types for Beginners
There are various types of investments that beginners can try, ranging from low-risk ones like gold investments to high-risk ones like stock investments. Each type of investment has its own advantages and disadvantages. Well, for KH Pals who want to start investing but are still confused about determining the best investment options, here are some recommendations that you can try.
Deposit
If you want to learn about safe and profitable investments, time deposits are one type of investment that you can try first. A time deposit is a deposit of money in a bank where the withdrawal can only be done within a certain period of time. This type of investment is one of the least risky investments because the profits can be calculated immediately. The way deposits work is that bank customers will save money in the form of deposit savings that can be adjusted to the period offered, for example 1 month, 3 months, 12 months, up to 24 months. Generally, the interest charged by banks for this type of deposit investment ranges from two percent to a maximum of 5 percent. This interest rate can also change because it follows Bank Indonesia’s benchmark interest rate.
Mutual funds
Who doesn’t know about mutual funds? Yes, mutual funds are a type of investment that involves collecting funds from investors that will be managed by an investment manager. This type of investment can be the right choice for beginners, because it has a lower risk compared to stocks. The capital needed is not too big, starting from Rp10 thousand only KH Friend can start investing. There are many companies that offer investments in the form of mutual funds. However, there are several things that need to be considered when trying this type of investment, namely:
- Determine investment objectives
- Recognize profile risks
- Looking for a trusted investment manager
- Check the various mutual fund fees required
- Checking the disbursement of investment funds
In addition, mutual fund activities are also more secure because they are supervised by the OJK.
Peer to Peer (P2P Lending)
Peer to peer lending is a type of crowdfunding-based investment, where investors (lenders) will provide loans in rupiah currency to debtors (borrowers) with higher returns. P2P lending is a type of short-term investment that is also widely used as an option by the public. Then, how does P2P lending work? This type of investment is usually done online through the company’s website platform. P2P lending allows us to give or apply for loans to each other without using the services of a bank. Based on the type of borrower, this investment is divided into two, namely consumptive P2P and productive P2P lending. To get the benefit of less risk, make sure to choose P2P that has been licensed and supervised by OJK.
Shares
Stocks are also one of the best types of investments that are most popular among the public. If you buy a stock that has been listed on the Indonesia Stock Exchange (IDX), then you act as a shareholder. You will get at least two benefits, namely from the price difference and from the dividends that are usually distributed by the company. But with this great advantage, stock investment is also balanced with great risk. Therefore, before deciding to jump into the world of stock investment, first establish your goals. Currently, there are also many classes and video materials that explain the basics of stocks, making it easy to learn. Moreover, there are many stock platforms in Indonesia that provide easy conditions specifically for beginner investors.
Gold
The next best type of investment is gold. Gold is a type of long-term investment and is easy for novice investors to do. Its value tends to stabilize and increase from year to year, so it can provide promising benefits in the future. For this reason, gold has been one of the favorite types of investment for a long time. Gold will also not be affected by inflation. The ease of buying and withdrawing at any time can be a special attraction for investors. Moreover, there are currently many platforms that provide gold installments so you don’t need millions of rupiah to start investing.
Bonds
Bonds are debt securities investments that are proof of loan transactions that have been carried out by the party issuing the bonds and the owner of the funds. Bonds themselves are issued by corporations or governments. This investment is suitable for beginners because of its low risk. However, KH pals are still advised to learn more about it, in order to benefit and avoid the risks that may occur. Bonds themselves are issued by companies and government agencies that are used as a form of borrowing money that will be paid back in the form of principal and interest called coupons. In addition to the benefits of coupons, bonds also tend to have a stable value.
Franchise
Franchise is a form of business cooperation between the owner of a trademark, product, or operational system delegated to a second party who gets permission to run a business. This type of investment is suitable for KH friends who have an entrepreneurial spirit. Franchise provides business experience as well as profits where business SOPs, raw materials, and employee management systems have been provided.
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Generally, franchise investment is engaged in the culinary sector which has a fairly broad market. Franchise is indeed a form of investment to support one’s career as an entrepreneur in a relatively fast time.
Property
Property or real estate investment is a purchase with the aim of obtaining a return on investment (ROI), through rental returns, and resale. This type of investment will be very profitable in the future, because the human need for property is always there. Its value, which tends to increase every year, makes property investment also highly targeted for those who have more capital. Moreover, it should be considered if property investment is also known as a minimal risk investment and there is a guarantee of high profits. Considering that property is a primary need that many people are looking for, it is impossible if there is a property that is not sold. How, are you interested in starting this type of investment?
Government Securities (SUN)
Many people may not be familiar with this type of investment. Surat Utang Negara is a debt acknowledgment letter that is guaranteed to pay interest and principal by the state in accordance with its validity period. In this case, Friend KH acts as an investor who provides loans to the government. There are two types of SUN investment, namely:
- Surat Perbendaharaan Negara (SPN), which has a maximum investment period of 12 months,
- Government bonds, suitable for long-term investment as they have a maturity of more than 12 months.
Cryptocurrency
After the concept of bitcoin was first introduced in 2008, cryptocurrencies became a highly sought-after type of investment. Cryptocurrencies are digital currencies that use blockchain technology. The significant difference with this investment is that it eliminates the role of banks as a third party. If interested, there are several types of cryptocurrencies to choose from such as Bitcoin, Litecoin, Ethereum, Eos, and Dodge.
What are the Benefits of Investment?
The main purpose of investing is of course to seek profit in order to have stable finances in the future. However, it is not limited to this, in fact there are several other benefits of investing. Here is the explanation:
Instilling Discipline and Frugality
In order to achieve maximum results, investment encourages its users to consistently invest. By setting aside money on a regular basis, a disciplined and wiser attitude in managing finances will be formed.
Additional Source of Income
Each investment will certainly generate profit or interest every period. If you choose a type of investment with high interest, the results can be used as passive income that helps your finances or become a useful emergency fund in the future.
Increase the Value of Money
Unlike saving in a bank, investing tends to increase the value of your money. Given the relatively small interest rate on bank savings today, the profit from saving is only enough to pay the monthly administration fee. On the other hand, if you invest, the value will increase and increase your assets.
Avoiding Inflation
Inflation is one of the unavoidable economic problems that make the value of currency go down. Imagine, if you have Rp50 million in savings in the bank now, it could be that 15 years later the amount will be worth less due to inflation. However, if the money is diverted to investment, the profit growth can beat the inflation rate.
More secure old age
There will come a time when one must retire and not have a regular income anymore. Therefore, by investing from now on, old-age savings can be well prepared and KH Friend does not need to worry about financial difficulties.
Tips for Profitable Investment
Now, KH buddy has known the best types of investment and the benefits of investment itself. So, have you decided what type of investment to choose? Or are you still confused about how to get started? So that you are no longer confused, here we have summarized for you a series of tips to make investing safer and more profitable:
Customize with Goals
The first investment tip is to determine the desired goal and timeframe. For example, KH Friend wants to continue his education in three years. After calculating the costs required, choose the type of investment that will generate profits according to the goal. That way, you as an investor become more focused and directed to the dreams you want to achieve.
Choose the type of investment you are good at
A fatal mistake often made by novice investors is not learning the risk factors of the type of investment chosen. Without proper knowledge, it is not impossible for the investment to fail due to miscalculations and strategies. For beginners, it’s best to choose low-risk investments such as time deposits, mutual funds, or gold.
Set up a Special Fund Post
Each type of investment has its own risks. In order to avoid losses, you should set up a special investment fund (cold money) that does not interfere with your savings account. The main rule is, never use all your money for investment! Keep an emergency fund that can be used to fulfill your needs if your investment is not successful.
Consistent Investing
Besides being thorough, being consistent also makes investing more profitable. In order to bring the desired results, KH Buddy can routinely invest every month according to the specified time period. Consistently added capital can generate greater investment returns.
The Importance of an Agreement Letter for Investment Activities
Apart from business needs, an agreement letter must also be made in investment activities, including if there are investors who want to invest in a business. Where this agreement letter becomes a legal document between the investor and the investee when providing capital with the aim of getting a return or profit. In the agreement, it must include various details related to the investment provided. Starting from the amount, scheme, the role of the investor, to how the business provides reciprocity to the investor. The agreement itself is divided into several types, namely:
Letter of Investment Agreement in the Form of Profit Sharing
Investment in the form of profit sharing is generally used by entrepreneurs who want to run a business together with their colleagues. For example, KH Friend wants to open a restaurant by involving your colleagues as investors through a profit-sharing system.
Business Investment Agreement Letter
A business investment agreement is usually entered into by a business entity (as an investee) with another entity or individual acting as an investor. This agreement contains rights and obligations, time period, risk of loss arrangements, and so on.
Sharia Investment Agreement Letter
This type of agreement is actually the same as a business investment agreement. However, the clause uses terms related to Islamic finance and must not violate Islamic law. Investment agreement letters are made for various reasons. There are several benefits that can be obtained by making this agreement letter, namely:
- Maintain the rights and position of investors as shareholders/investors
- Avoid cheating by one of the parties
- Safeguarding the rights of those who manage investment funds/assets
- Provides legality and legal value to the agreements made
KH Contact
From the explanation above, it can be concluded that there are several types of the best investments that KH pals can choose correctly so that your financial goals are achieved and avoid fraud. Especially for beginners, do not be easily tempted by investment invitations without knowing the procedures clearly. Therefore, it is very important to make an investment agreement letter as previously explained. Moreover, making an investment agreement letter is now easier thanks to the existence of Legal Contract. We provide investment agreement letter establishment services with costs starting from IDR 2 million and 24-hour service completed 100 percent online without face-to-face! Let’s make your investment activities safer and more profitable with the service of making a letter of agreement at Kontrak Hukum! For ordering information, please visit this page. If you have questions related to business and other legality needs, don’t hesitate to consult with us at Tanya KH or via Direct Message (DM) to Instagram @kontrakhukum.
