5 benefits of Investing the amount you earn from trading:
A thread... 👇 👇
A thread... 👇 👇
1. Generate passive income:
Investing for the long term does not require frequent monitoring, also if you are not sure where to invest, index funds can be the best option (eg NIFTY bees).
As and when the markets go up, you make money passively (without active trading).
Investing for the long term does not require frequent monitoring, also if you are not sure where to invest, index funds can be the best option (eg NIFTY bees).
As and when the markets go up, you make money passively (without active trading).
2. Lower tax:
For equity funds, STCG and LTCG are taxed at 15% and 10%(above 1 lakh) respectively, whereas income from trading is taxed according to the individual tax slab rate.
Thus investing the excess money can provide the benefit of a lesser tax rate.
For equity funds, STCG and LTCG are taxed at 15% and 10%(above 1 lakh) respectively, whereas income from trading is taxed according to the individual tax slab rate.
Thus investing the excess money can provide the benefit of a lesser tax rate.
3. Diversification:
According to Warren Buffet - "Never depend on a single income. Make investment to create a second source".
The average millionaire has seven sources of income.
Thus the profits generated from trading can be used to invest in other assets.
According to Warren Buffet - "Never depend on a single income. Make investment to create a second source".
The average millionaire has seven sources of income.
Thus the profits generated from trading can be used to invest in other assets.
4. Lesser volatility:
Futures and options are leveraged instruments, thus there could be wild fluctuations in your p&l.
Investing in other asset classes would provide mental peace from such fluctuations.
You don't rely on trading as your primary source of income.
Futures and options are leveraged instruments, thus there could be wild fluctuations in your p&l.
Investing in other asset classes would provide mental peace from such fluctuations.
You don't rely on trading as your primary source of income.
5. Pledging:
Investment in index funds, stocks, etc can become useful in tough times, as by pledging them additional margin can be utilized in firefighting.
This can be used to make extra percentage returns throughout the year.
Investment in index funds, stocks, etc can become useful in tough times, as by pledging them additional margin can be utilized in firefighting.
This can be used to make extra percentage returns throughout the year.
Conclusion:
In order to maximize our returns, we can actually strike a balance.
So keep buying and building your long-term portfolio while making trading profits week on week.
After a few years, the portfolio will be very big.
In order to maximize our returns, we can actually strike a balance.
So keep buying and building your long-term portfolio while making trading profits week on week.
After a few years, the portfolio will be very big.
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