PORTALJABAR, BANDUNG CITY - Financial freedom is a condition when someone is able to fulfill their desires without having to rely on active income, because they already have enough assets. One way to achieve financial freedom is through investment in the capital market, which offers various instruments such as stocks, bonds, government bonds, mutual funds, and Exchanged Traded Funds (ETFs).

Head of the West Java Indonesia Stock Exchange (IDX) Representative Office Achmad Dirgantara said that investing in the capital market allows funds to grow over time through capital gains and dividends. History shows that stock indexes on the stock exchange have experienced significant increases in the long term, despite short-term market fluctuations.

"Investing in stocks and bonds allows investors to earn passive income regularly. By becoming a shareholder, investors have the potential to receive dividends every year, which provides an additional source of income that can be used for living expenses or reinvested. In addition, stocks provide the potential for capital gains from buying and selling stock transactions on the IDX," said Ahmad, Monday (24/2/2025).

Meanwhile, bonds according to Achmad, provide fixed coupons (interest), which are ideal for investors looking for more stable investment returns. Bond coupons or debt securities are generally paid every semester or every quarter. Just like stocks, bonds can be traded on the BEI secondary market, so they have the potential for profit in the form of capital gains.

"But it must be remembered, buying and selling stocks and bonds both have the risk of capital loss, or loss in transaction value if the stock price or bond price experiences a price decrease, compared to the purchase price. One way to reduce the impact of risk is to diversify the investment portfolio," he said.

Investing in the capital market allows investors to diversify as risk management, because there are many types of instruments in the capital market. One type of investment alone, namely stocks, is listed as many as 943 stocks until December 2024 on the IDX. A diversification strategy helps reduce risk if the price of one asset falls, because investors have exposure to various sectors and instruments.

According to Achmad, in addition to stocks and bonds, mutual funds and ETF instruments provide access to a diversified portfolio, and are managed by professionals, namely investment managers. Investment managers have a good diversification strategy to ensure that investments continue to grow even though they still have risks according to the type of mutual fund.

"Investors can choose instruments that suit their risk profile and financial goals. There are several types of investors, namely aggressive, moderate, and conventional. Aggressive investors are investors who dare to take high risks, with the potential for large profits. The choice for aggressive investors is stocks and ETFs with high growth," he explained.

With the right investment strategy, one can build a portfolio large enough to finance life in retirement without relying on their salary or children. For example, if someone has an investment portfolio worth Rp5 billion and adopts a withdrawal strategy of 4% per year, then he can withdraw around Rp200 million per year without spending his principal. However, this strategy needs to be combined with regular evaluation to ensure that the portfolio continues to grow above inflation.

"Investment in the capital market is an important step in building financial freedom, which allows for asset growth, passive income, and protection against inflation. With discipline, understanding of current conditions, and a long-term orientation, the capital market can be a primary tool in realizing financial freedom," concluded Achmad. (no)