Investment Tips: Saving is the first step, but to achieve financial goals, it is more important to take the decision related to investing your hard earned money at the right place.
Investment Tips: To achieve financial freedom, it has been taught for a long time to save but this is not the complete truth. Saving is the first step, but to achieve financial goals, it is more important to take the decision related to investing your hard earned money at the right place. To increase your hard earned money, you should look at many options and then invest after that so that you can get great returns even in rising inflation.
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While investing, a decision should be taken on the basis of your income, age, risk appetite and available time. The sooner you start investing, the longer you will get to build up huge capital for yourself.
It is considered good to start small in terms of investment. Even Rs 1000 per month is a good start. It is important to make investing a habit, no matter what the amount. Keeping the starting amount small helps you to monitor it every month.
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Build a fund for an emergency
Along with investing, it is also important to build an emergency fund. With this, if you need money in an emergency, your financial goals will not be affected and you will also get money. Save 3-6 months expenses in FD or liquid funds as an emergency fund.
Keep portfolio diversified
Do not invest your entire money in a single option. Divide it into multiple parts and invest in multiple options including equity, debt and gold. By doing this, if the return is not good in one option, then it can be compensated by the other option. This way your portfolio will be balanced.
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Invest your capital in equity for at least three years. Follow a passive investment strategy while investing in it. Passive investing approach invests in equity indices like Nifty 100 or Sensex. These are cheaper than active funds i.e. actively managed funds. Passive funds charge between 0.2% – 0.3% while active funds charge between 1% and 2%. Also, according to some research, a large proportion of active funds are unable to perform better than passive funds over a long period of time (10 years or more).
Debt and gold investment
Buy a liquid or savings fund while investing in debt. At present, interest rates are rising here, so you can also consider floating interest rate funds. Also invest in gold to diversify the risk appetite of equity investments. Investing in gold will balance the returns of your portfolio in case of a sharp fall in equity.
(Article: Abhinav Nayar, CEO, Mool)