Plan Your Retirement By Investing In Stocks

Plan Your Retirement By Investing In Stocks
by Nutan Gupta 08/02/2017

Retirement is considered as the phase wherein individuals can finally put a halt to their work and enjoy the little things in life. Unfortunately, with the growing fast paced city life, one requires a steady flow of capital income to enjoy this. This is where planning in advance for your retirement helps.

Take an example of two good friends - Rajan and Puri. Rajan and Puri earned a decent living when they were young. Puri was a shortsighted person; with no regard for long term goals. Rajan, on the other hand, was quite the opposite and always suggested Puri to think of the future. Some years after their retirement, Puri was rendered debt-ridden. He was drained of all his savings. But Rajan stepped in to help out his friend. He could do this for he thought of the future. He invested in stocks.

Why Buy Stocks?
Rajan had been wiser to learn about the importance of stocks and stock market-based trading. Let’s look at a few reasons why people like Rajan felt the need to buy stocks:
1) Buying a stock of company basically enables you to an ownership stake. The more you buy, the greater is your ownership of a company.
2) Beating all other kinds of investment, returns obtained from stocks are exceptionally high. This high rate of growth is what makes stocks an interesting asset in the first place.
3) The profit that comes in after selling of shares would be tax-free if you hold the stock for more than 12 months. Hence, long term gains policy helps you keep all of what's yours to yourself.
4) Dividends that flow in periodically ensures that one doesn't have to sell their stocks and can treat it as an income. For a retired person, this is almost like a saviour, making them quite independent. 

How Do You Buy Stocks?
Buying stocks is a relatively easy process.
1) Identify a stock broker. It could be an online brokerage firm or you could meet them in-person.
2) One would need to open a Demat account to carry out stock holding related transactions.
3) Take a call. Decide what to buy and convey the order to the broker. 
4) All orders taken are settled on a T+2 time period basis. Here, T stands for the day trading of stocks took place, while T+2 indicates 2 business days after which the order will be settled.

The Bottom Line

Buying stocks is certainly not a difficult task. All it requires is patience and one’s awareness. Apart from savings, stocks certainly diversify and helps boost one’s portfolio.
There is a risk, no doubt. But surely there wasn’t a time when mangoes grew closer to the ground.
With greater growth rate, retired men can utilize the higher dividend as their supplementary income. This, in turn, further enables self-belief and encourages one to try and grasp for more. Certainly, investment in stocks paves way for a smoother retired life.