What is Lump Sum Investment?  These are 5 tips for those of you who want to try

What is Lump Sum Investment?  These are 5 tips for those of you who want to try
 Suitable for those of you who don't want to be bothered, but check the risks

  Investments can be made by various methods.  Apart from cost averaging or on a regular basis, investments can also be made by means of a lump sum or one-time payment.  Reporting from Lifepal, the term lump sum is a universal term that describes a single payment method, or one payment.

 Some investment instruments such as deposits, bonds, sukuk, or P2P lending funding can also only be purchased using a lump sum method, and cannot be purchased on a regular basis.  But in fact, a lump sum can be used for any instrument, be it stocks, mutual funds, or even gold.

 What should be considered before we decide to invest in lump sum for beginners?  Here are five tips from Lifepal.

 1. Suitable for those of you who are not disciplined to invest
 What is Lump Sum Investment?  These are 5 tips for those of you who want to try investment illustrations (IDN Times/Aditya Pratama)
 In financial planning, the ideal saving ratio is at least 10 percent of your monthly income.  However, setting aside 10 percent of your monthly income for a novice investor or one who has never invested, will certainly be quite difficult.

 One advantage of lump sum investing is that you no longer need to spend money per month to deposit money to invest.  With only one payment, then you only need to wait until it is due.  Or until the time when the investment instrument must be disbursed.

 2. Less profitable with small capital
 What is Lump Sum Investment?  These are 5 tips for those of you who want to try money illustration (IDN Times/Umi Kalsum)
 The greater the investment capital you deposit in a lump sum, the greater the profit.  However, if you only use small or limited capital, then the returns will be smaller.  With a small return, it is likely that the investment you make will not meet your financial goals going forward.

 For example, you invest in government securities ORI018 which has a coupon yield of 5.7 percent per year and a final tax of 15 percent.  So with a capital of IDR 10 million, you will receive a net profit of IDR 47,500 per month.  Meanwhile, if you put down Rp. 20 million, the net profit is Rp. 95 thousand per month.

 Eits, for the record, the greater the capital, the greater the potential risk you will experience going forward.

 If you sell it on the secondary market and experience a capital loss, the capital loss will be even greater.  If you buy government bonds with a capital of Rp. 10 million, and sell them at 95 percent of the nominal price determined by the bond issuer (par price) in the secondary market because the value of the bonds is falling, then you will experience a capital loss of Rp. 500 thousand.

 Meanwhile, if the initial capital is IDR 20 million and the sales are 95 percent of the par price, then the capital loss you receive can reach IDR 1 million.

 3. If you want a lump sum, choose a fixed income instrument that is low in risk
 What is Lump Sum Investment?  These are 5 tips for those of you who want to try Investment Illustrations.  (IDN Times/Aditya Pratama)
 The return on investment can actually be divided into two types.  The first is a capital gain, or an increase in the value or price of an investment instrument and the second is a fixed income return.

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 Called fixed income because the financial instrument provides periodic interest payments to investors, and a return of principal at maturity.

 Some investment instruments that can provide fixed income and are generally owned by retail investors are deposits and state or private debt securities, both in the form of bonds and sukuk.

 If you are a beginner or have never invested, the deposits provided by the bank are deposits guaranteed by the Deposit Insurance Corporation (LPS), while for state debt securities, such as ORI, the guarantee is stated in Law Number 24 of 2002 concerning Government Debt Instruments.

 Keep in mind, the risk of capital loss may exist if you intend to sell these securities on the secondary market.  But if you choose to hold it until maturity, you will be free from that risk.

 Avoid doing large lump sums in high risk investment instruments such as stocks.  Just imagine, if you buy lump sum shares in large quantities, the potential for capital loss will certainly be greater considering that stock fluctuations in the short term are quite high.

 4. Lump sum is more suitable for short to medium term investment
 What is Lump Sum Investment?  These are 5 tips for those of you who want to try (IDN Times/Arief Rahmat)
 A lump sum investment is certainly more suitable for you to meet your short to medium term needs.  Call it for an investment period of under five years, such as for preparation for marriage, paying a down payment on a house purchase, worshiping the Holy Land, renovating a house, and others.

 There is a strong reason why beginners are not advised to invest with a lump sum technique for long-term needs, such as to meet retirement funds or the needs of children's education to a higher level.

 The need for pension funds in old age as well as children's education for higher levels is certainly not small.  This figure could touch billions of rupiah.

 Let's say, Mr. Robert, who is 30 years old, decides to retire at the age of 50 with a total cost of living of Rp. 5 billion, which has been calculated based on inflation.  If he decides to invest with a lump sum for now, then he must deposit Rp1.55 billion into investment instruments with a yield of 6 percent per year.

 Doing a lump sum for long-term investment certainly has the potential to reduce the availability of a person's current assets (available cash) in large amounts.

 5. Before investing, calculate the target funds needed with a lump sum investment
 What is Lump Sum Investment?  These are 5 tips for those of you who want to try Investment illustrations.  (IDN Times/Mia Amalia)
 Before you buy an investment instrument by means of a lump sum, then calculate it first for your future funding needs.  You can use it with the future value method.

 In the example of Mr. Robert's case described in the previous point, Mr. Robert has calculated the amount of money needed in the future first, which is Rp. 5 billion.

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