Investments are a great tool to advance your financial stability. In times of uncertainty when your only source of income comes to a dead-end, any investment you’ve previously made will definitely help to navigate the rough waters. And what’s wrong with having more than one stream of stable income? If anything, it would only enhance your living conditions and upgrade your lifestyle.
If you are a salaried employee who entirely depends on your one source of income, you need to read this to learn more about the best investments for employees.
Having a fixed monthly salary certainly sounds more stable than a new startup or business, which may or may not reap benefits. But, what if you lose your job due to unforeseeable circumstances? Or what if you had to quit your job for one or the other reason and now you have no income coming in? If you had depended solely on your monthly salary, with significantly fewer savings, the chances are that any progress you’ve made on financial stability could come crashing down.
So then, why take the risk and put yourself in trouble? Why not take a small portion of your savings and put them in smaller investments that will ultimately only benefit you in the long run?
Which is the best investment option?
From deposits and mutual funds to provident funds and pensions, the traditional methods of investments are many. However, as the world is becoming increasingly digital and moving to digital modes of payment systems, the best investment option you could make as a salaried employee is to invest in cryptocurrency.
You surely would’ve heard of cryptocurrency, but if you ignored it, thinking it’s too complex a technology for you to learn about, then it’s not. In fact, cryptocurrency is increasingly becoming the best investment option of several investors and ordinary people alike as an asset class. Not only is cryptocurrency one of the best investments for salaried employees in the modern world, but it also has several other benefits that we will discuss below.
Introduction to cryptocurrency
Cryptocurrency, based on blockchain technology, works as an independent decentralized digital currency that does not require the authority of financial intermediaries like banks. It is one of the best investment options for employees who are looking to diversify their portfolios and improve their incomes. Anyone can buy or sell cryptocurrency on reliable crypto exchange platforms. With no mediator between the buyer and seller and comparatively lower transaction costs, you can use cryptocurrency in any form you like. And your transactions will remain largely anonymous.
How to invest in cryptocurrency?
Considering that you are a beginner at cryptocurrency investments, it is best to start small. Invest a small portion of your portfolio first, and as you learn the tricks of the trade and understand market conditions better, you can start investing more. An ideal amount to be allocated for cryptocurrency is about 3-6% of your portfolio.
Understand that, just like any other investment, cryptocurrencies are also subject to volatility. Many people make the mistake of blindly investing in cryptocurrency after they’ve heard stories about how much its value has rocketed. These very people lost huge amounts of money when the market eventually crashed. Unlike investing in gold or shares, this investment does not pay you back in dividends, interests, etc.
In addition to this, most countries are still developing regulations related to cryptocurrency. Hence you should expect anything from favorable regulations to an outright ban. Due to all these reasons, it is ideal to start with smaller investments.
2. Do your research and choose the type of cryptocurrency
Although it is most likely that the only cryptocurrency you’ve heard about is Bitcoin, you need to know that there are several other currencies too. Besides investing in Bitcoin, other prominent cryptocurrencies you can consider are Ethereum, Litecoin, Tether, Cardano, etc. If you’re serious about investing, then you need to do thorough research on which type of cryptocurrency you’ll be investing in. You should also go through the whitepapers of each coin you are investing in to know what you can expect from investing in it.
3. Choose the right platform
The next most crucial step in your journey to investing in crypto is choosing the right platform or exchange. You can find exchanges that offer either fiat to crypto or crypto to fiat. The most prominent exchanges in the world are centralized, where the exchange platform acts as the intermediary. However, if you dont want an intermediary, you can go for decentralized exchanges. When choosing an exchange, you need to do extensive research again. While choosing an exchange, some of the most important factors include its geographical location, the level of transaction fees, liquidity and volume, exchange interface, and security features.
Geographical location is vital because you do not want to choose an exchange platform that is not accessible from your location. Volume and liquidity can help you decide the platform’s credibility, while transaction fees can help you compare between the different exchanges. A user-friendly interface obviously matters, and security is of utmost concern since you do not want to lose out on all your money.
While you’re at it, do some research on how the exchange will store your money. Many centralized exchanges are infamous for cyberattacks, so keep that in mind while making a decision. If you will frequently use your cryptocurrencies, a hot wallet that operates on the cloud is the better option. If you’re, however, storing money for a longer time, go for cold wallets. They are much more secure since they are physical and do not operate online. You can also choose from hardware wallets and paper wallets.
WazirX is the best and most trusted cryptocurrency exchange in India. It lets you trade a wide variety of cryptocurrencies on different platforms and offers exceptional security features. Their platform interface is not just excellent but allows faster transactions as well.
Now that you’ve got all the information you need on the best investment options, you are all set to start investing in cryptocurrency.