This is a series of posts that I have started for those who want to get into investing but do not understand the concept of investing. This series will be a three stage series and every stage will have different chapters.

Stage I will cover Basics and Concepts for Beginners
Stage II will cover the Intermediate level
Stage III will be Advanced level

Before going further, I want to disclose my level in the field of investing, so that you can take a decision whether to go for this Recipe or not! Currently I am on an intermediate level and to reach at this stage it took me four years. It is typically a self learned study over this period and loads of mistakes done before reaching such a stage. I do not guarantee that you will be perfect investors after reading this series but yes! You will be getting better returns than an average investor gets. I am saying this because I too will be on the same ride with these lessons as you are after reading.

Anyways let’s get started:

Chapter 1; Defining Objective
Why do you want to invest money? To answer this question, most people give answers which appear irrational to me.

Others invest so should I
There is lot of money in the share market
The Market is booming buddy! I saw this in the news
I want to invest because I want to invest, there is no particular reason.
I want to save on taxes by investing into shares

If you have similar reasons for investing which are similar to above, you definitely should read the rest of the post and the whole series, but if not then you can skip this chapter.

So why should you invest?
The answer to this can be vague but not irrational.

I want to invest so that my investment gives me a cover for my future plans/goals
I want to be financially free by XX years
Provision for higher studies for my child
I want my money to work for me.
I want to beat the inflation

The list is not limited to above; you can have your exclusive reason that can substantiate your investing. For me! It is “I want to get financially free by XX years”

The next big question is, why do I need an objective to invest? A very clichéd line suffice for this, “You have to have a goal to keep you motivated and directed”. You need to know the purpose of investing! As simple as that, find a reason to invest before you start investing, remember you studied 20 years of your life to get a job, the final goal was to get a job, to be independent, and to enjoy luxuries which a job can provide. Same is the case with investing; you need to know why you should invest before you even think of investing.