How you use your money makes a big difference in terms of the returns it fetches you in long run. Here are 5 ways you can make your money earn for itself:
Financial planning is good for starters
Financial planning is the first and the most important step for building your retirement corpus. Financial planning commences with understanding your risk profile. Based on your risk profile and expected investment time horizon, you can create your financial objectives. This is a crucial step since your investment and returns must be mapped effectively with your objectives.
Clearing your loans plays a vital role in creation of long-term corpus
Repaying your existing loans such as a car loan, credit card loan, and other personal loans is very important. This ensures that the rest of the money that you earn will be free for any other thing that you want. Thus, you can set aside 25% and not any more to spend on things such as foreign vacation and resolve to save the rest.
Invest your money in mutual fund SIP to make it grow faster
Mutual funds are fast-becoming one of the best investment options for investors aiming to earn returns that beat inflation in the long term. Invest your money in diversified mutual funds. In case find it difficult to invest in mutual funds or are not able to make up your mind on the best schemes, take help from a professional expert. These professional financial advisors help you largely in diversifying your money in equity investments such as mutual fund SIP, liquid funds, and fixed income funds. They provide you with mutual fund investment strategies based on your investment objectives. For instance, they can help you invest in various SIPs in mutual funds while keeping a larger chunk in liquid funds rather than a normal bank savings account. As the markets move up, so will your equity mutual fund investments. Your remaining equity funds will have the potential for meeting your expenses for the next five years. That’s the power of mutual fund SIP.
Expend money in line with your objectives. Don’t overshoot your budget
If it is important to have financial objectives, it is even more important to ensure that you follow your objectives. Therefore, you should ensure while expending your money to keep a close watch on whether or not it is affecting your accomplish of financial objectives. If you feel it is, then it is time to review those expenses, since nothing’s more important than your financial security in the future. Certain decisions you take now, will have a huge impact on your financial future. If you buy a dream home in a prime locality, which will take you way beyond your budget, all you are doing is hurting your financial security for the future. It is always good to start humbly by buying a house in a cheaper locality and slowly work towards your dream home. You like going on exotic vacations, so do I, but how many times should we go for a vacation in a year. The answer is simple. It depends on your financial objectives and income levels. However, please note that too many exotic vacations today will only deplete your funds for the future, do think before you spend. Plan for future uncertainties such as your parents getting hospitalized or for any other unplanned contingencies. These will eat into your funds despite having good health insurance cover. Even before you know, you will see your corpus go right in front of your eyes and all you can do is just retrospect that you could have been more frugal in your earlier phase of life. Financial planning is all about planning for tomorrow while living in today.
Keep a constant watch on your investments
No matter how good a plan you have in place, please monitor your investments at regular intervals. Check the factsheets of the mutual funds you have invested in. Subscribe to their newsletters and get as much information about them as possible. Keep a close eye on the way the benchmark indices are performing and try to ensure that your mutual funds investments are not going well below the performance of the indices. If yes, it may be the right time to review and change your SIP scheme.
Be wise with your money, not otherwise. Think long-term equity investing in mutual funds. To know more about financial planning, investment, and mutual fund SIPs, Write us on [email protected]
Mutual fund investments are subject to market risks. Please read the offer document carefully before investing.