Writer M. Taufiq Habibi Silaban, MICRA Program Assistant
Editor Regita M. Rusli, MICRA Program Development & Alternatives Manager
Investment is one of the best ways to achieve financial freedom. With the right strategy, you can develop your finances and ensure a more financially secure future. In this article, we will discuss types of investments, strategies, and tips for managing your finances to achieve better financial goals.
What is Investment
Investment is an activity of placing capital or assets into an instrument with the aim of obtaining a return on the funds invested, whether in the form of interest, dividends, or appreciation in asset value.
The Importance of Investment
Against Inflation: The value of money continues to drop over time, and investing can help maintain financial stability.
Increase Income: With the proper strategy, investment can be a source of passive income.
Prepare for the Future: By starting to invest now, you can prepare for retirement and meet your long-term needs in the future
Before investing, you should be aware of and understand the different types of investment
Types of Investments
Stocks Stocks are certificates of ownership of a person or business entity in a company. Stocks are one of the most popular investment instruments and are widely chosen by investors because they can be easily traded on the stock exchange, allowing investors to liquidate their investment at any time.
Example:
You buy 1 lot or 100 stocks of PT Bank Central Asia Tbk (BBCA) at a price of IDR 9,000 per stock, then the total you have to spend is IDR 900,000. After 6 months, the stock price increases to IDR 11,000 per stock or IDR 1,100,000 per lot. If you sell the stock, the profit you get is IDR 2,000,000
Advantages: High potential returns.
Risk: High volatility.
Suitable for: Risk-taking investors.
Mutual Fund A mutual fund is an investment vehicle that collects funds from investors and is managed by an Investment Manager to be invested in various financial instruments, such as stocks, and others.
Example:
In 2018 you invested in a mutual fund of IDR 2,000. Then in 2021 the stock market rises and your investment also increases from Rp. 2,000 to Rp. 2,500, so you have made a profit of 25% in 3 years.
Advantages: Managed by professionals, risks are diversified.
Risk: Depends on the type of mutual fund chosen.
Suitable for: Beginners who want to invest diversely.
Property Every year, property prices always increase. Investing in property is a long-term investment that generates income from rent or an increase in the selling price of the property.
Example:
You buy a house in an urban area in 2020 for IDR 500 million. After 2024, the urban area experiences infrastructure growth, and your house automatically increases in price by 40%, to IDR 800 million.
Advantages: The value of the asset tends to increase.
Risk: Large and illiquid initial capital.
Suitable For: Long-term investors with large capital.
Gold
Investing in gold has a stable price value and can even increase in value over time. Therefore, gold is often considered a safe haven asset or a stable asset in the midst of economic crises and is resistant to inflation.
Example:
You buy gold in 2018 at a price of around IDR 600,000/gram. Then in 2020 (COVID-19 Pandemic) the price of gold jumps to IDR 1,000,000/gram due to economic uncertainty.
Advantage: Stable and liquid.
Risk: Not receive passive income
Suitable For: Long-term store of value.
Crypto
Crypto investment is the activity of buying, selling and storing digital currencies, such as Bitcoin or Ethereum, with the expectation that their value will increase in the future. Currently, applications for crypto investment vary widely, so make sure the application has been verified by the OJK and Bank Indonesia.
Example:
Digital currency BTC (Bitcoin)
2010: 1 Bitcoin = $0,003
2017: 1 Bitcoin = $20.000 (first major increase)
2021: 1 Bitcoin = $69.000 (highest price in history)
2024: 1 Bitcoin = ±$43.000
Now, regarding buying and selling crypto, there are many fintech applications that provide this. For example, there are Pluang, Bibit, TokoCrypto, etc. You can buy it in the application and be given guidance before investing, so you don't need to worry.
Advantages: Huge Profit Potential.
Risk: Extreme price fluctuations..
Suitable For: Experienced investors who are willing to take risks..
If you are unsure about starting an investment, you should try some investing tips.
Investment Tips
Define Financial Goals: Before investing, you should understand and know why you want to invest. Whether it's for retirement, buying a house, or your children's education. Avoid investing just because of Fear Of Missing Out.
Understand the Risk: Once you know your reasons and goals, understand the investment risk you choose. Try to follow the assessment of your investment risk profile. Don't just be tempted by the profit, but also understand the potential loss.
Portfolio Activation: When starting an investment, be careful and pay attention to your investment portfolio. And don't put all your money in one type of investment.
Invest with Knowledge: Do your research before investing and keep learning..
Be Patient and Consistent: Investing is not a get-rich-quick scheme, but it takes time and a well-thought-out strategy.
Conclusion
Investing is an important step towards financial freedom. By understanding the types of investments and implementing the right strategy, you can build wealth and achieve financial stability in the future. Start now, adjust it to your risk profile, and enjoy the results later.
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