Investment is a significant aspect of the economic growth of a country. This aspect should be taken seriously, and without investments, you not only harm your finances but also hamper the economy of the country as well. The thought of investments daunts most people as they have a notion that there are high risks in investing your money on the various aspects of investments. This is not true, there are risks in investment, but when researched and gained proper knowledge of the multiple things of the investment procedure, there are rather high chances that you will earn high on the returns.
The government of a country can, however, help in the encouragement of the investment dominion, and through this, the young and new investors can get motivated in the process of investment. You should start investing in the share markets as there are high rates on return from that dominion.
There are higher risks but when researched and studied well these share market stocks can avail you more profits than any general banking sector or real estate and gold investments. You should start with an IPO which will help you initiate the process of investment in the share markets. When you think of any factors as to How does an IPO Work, you should know that the initial public offering is a form of investment where the investment is underwritten by a few investment banks that will also list your money to a few stock exchanges. This is a secure method of starting the investment.
There are different ways as well in which you can start your investments like in the banking sector where the compounded interest, as well as the low-risk factor, can help you earn money, a vast amount of money in the long run. For young people, however, the stock markets are a fantastic realm to take risks as age and time are on their side. If ran on loss they can gradually make up for the loss in small amounts of excess profits.
Ways the Government can Help in Encouraging the People to Start Investing
- Financial Minister – a government, should appoint a finance minister who is potent in the various aspects of investment culture and is also able to encourage the people to invest in the various profitable sectors to earn money. A finance minister should be proficient and should also promote savings and investment of the country. Through investment, a lot of the country’s businesses and entrepreneurship depends and is relying on. With the investment flowing in on a free manner, there will be a lot of progress in this sector.
- Help in Purchasing Stocks and Share – it is often unaffordable and daunting to make the first steps of financial investments, and that too in the dominion of the share market. When there is the help of the government in the purchase of the stocks and shares, there will be an ease in the mind of the investor as in case of a loss it will not be borne by him/her alone. The indebted investor in time can repay this debt through their profits. They will realize that the aspect of investing is not as fearful as expected.
- Reduction of Taxes – when there is a reduction of the taxes from the part of the government, there will a more motivating factor in savings and investments. This is also indirectly helping the government in their economy. Rather this aspect will be more helpful for the government of the country in the long run. With the reduction of income taxes as well as other business taxes there will be more savings from the part of the people, and this will bring up the trend of investment sooner than later.
- Entrepreneurship Development – with the enhancement of entrepreneurship development, there will be more entrepreneurs, and they will have a knack towards investment with their excess money. Entrepreneurs are smart money makers and will always search for the best and profitable way to make money, and this is through the investments, though there are risks. With entrepreneurship development programs and subsidies as well as incentives, a government can encourage and develop the entrepreneurship scene of their country.
- Technological Innovation and Progress – with better progress and development of their technology there will be more flow of investments. You can even start the stakes through the stock market with the help of IPO and if you are wondering as to How does an IPO Work, you should know that these are the best way in which a privately owned company can be publicly owned through the sold shares. Technical advancements can help in the encouragement of investment in ways that are still majorly incomprehensible.
- Reduction in Government Regulations – with the decline of the government policies there will be more flexibility and freedom in the realm of investment. This can act as a significant motivational factor for the young and new investors. Especially the new investors are daunted by authority and want to avail freedom in all ways that they can avail from. They are the populace that needs to be encouraged the most for the prospects of investment. The investment realm is feared often by the young people due to the emotional connection when there are some relatives or known people who have suffered loss through this factor.
- Nil Inheritance Tax for all Assets – with the extension of the nil tax rate over all the inheritance taxes overall assets there will a massive increase in the investment dominion. There will be more investments as there will be more people who will invest their inherited assets and through this, the country will get more and more investments. In turn, this has the potential to help the nation in better ways that the inheritance tax does.
Through these various ways, the government can help in the encouragement of the process of investment in the modern times. It is an essential and of vital significance for the country’s economy as well as its people. With the government helping and aiding the investment of the new and young investors, a country has a high potential for the better results of economic status.