Investments are not just for the wealthy; anyone can invest.
This was the message from the Chief Financial Officer of the Unit Trust Corporation, Kerri Maharaj, as he addressed the Central Bank’s Money Matters Made Simple Series on Wednesday.
According to Mr Maharaj, investing is a tool that can help anyone build financial security and grow their money over time.
“All investing has a certain amount of risk; you can decide how much risk you would like to take. What do you feel comfortable with? That is not a barrier for investing. Risk here means the potential for loss or the uncertainty you accept. It does not mean the loss will occur. It just means there’s a potential, and you have to accept that potential.”
He also outlined which part of a person’s income should and should not be used for investing purposes.
“Day to day money is not for investing. So what you need to spend during the month, you can’t invest that. You have to invest only surplus funds. Funds that you wouldn’t need for a while. So all investing decisions requires you to make that trade-off between risk and reward. What you have to remember is investments have different risks and potential returns.”
CFO Maharaj also offered guidance for those looking to start investing. He said choosing the right investment requires careful consideration of one’s financial objectives, appetite for risk and long-term plans.
“Importantly, invest only in what you understand. So you have to make sure that you are properly explained what is the thing that you are investing in. Do not put all of your eggs in one basket. Let’s think about that for a minute because we’ve all heard that expression, but what it means is that if that basket falls, what happens to all the eggs?”
The Money Matters Made Simple Series is an initiative of the Central Bank of T&T that simplifies the bank’s most requested topics.