Personal Investment 101: Start Small to Save Big
Own a car by the age of 25. Tour the world by the age of 35. Buy a house by the age of 50.
Realistic, achievable goals, that you strive towards, in a quest to provide yourself and your loved ones a happy and prosperous life. There are many essential ingredients which go into realizing your much-cherished dreams but none as vital as the first ingredient – diligent financial planning.
Financial planning is a fairly simple endeavour.
It simply involves keeping track of your expenses, working on a monthly budget, saving money for your emergency funds and investing the rest smartly.
With a little bit of foresight and some simple investments, you can make money work wonders for you. Smart investments are the fuel which will help you generate the monetary corpus required to achieve your dreams.
Goal Based Investing
But where do you start? Simple.
Let your goals drive your savings and investments.
First, define your objectives. Estimate a ballpark figure and a time period to complete these objectives. These dictate your savings and investment plans. Saving with a certain objective in mind is the first step towards goal based investing.
Your objectives have to be classified into long-term, mid-term and short- term. You might want a vacation in Paris in a year from now and also want to own a house 10 years down the line. It is essential to quantify your goals right at the start of your career and take into account the myriad factors such as inflation, which might affect your estimated monetary figure.
For instance, the dream house you wish to build in the next 15 years from now is going to cost you Rs 10,00,000. If you start saving today to accumulate the amount, you will find that at the end of your time-frame, you might fall short of money. The reason? Inflation. At a rate of 7%, it will lead to prices multiplying 2.8 times. This means what would cost Rs. 10 Lakhs today might be valued at Rs. 28 Lakhs, 15 years from now.
And how do you beat inflation? By investing smartly and cleverly into market-lined mutual funds which will generate high returns helping you build a monetary corpus – investing in mutual funds.
Mutual Funds Investing
Mutual funds are one of the most common and preferred ways of investing your savings today. They are easy, quick and convenient financial instruments especially for those who are just starting out their careers. It helps you save and invest small amounts and generate big returns.
Who doesn’t value money and aspire to create wealth? Mutual Funds help us do exactly that.
Mutual funds are generally a basket of investments, which include equity, stocks, bonds, gold, etc. This basket can be curated as per the needs and financial requirements of the investor. Many small investors come together to pool their resources in a single, large fund, which in turn, provides mutual growth and prosperity.
You can begin your investment journey with as low as Rs 100, which means you can lay a solid foundation to your financial future at the cost of a movie ticket!
Starting a Systematic Investment Plan (SIP), where you invest a fixed amount every month into a mutual fund is ideal for those who are new to investing. The monthly investment is low, the risk associated is moderate and the returns, well, great!
It helps you realize your dreams without disturbing your present expenditure and lifestyle.
Depending on your goals, you can choose to invest from a wide array of Mutual Funds that suit your financial objective. Risk-averse? Invest in debt-oriented funds. Want instant funds? Choose Liquid Funds. Want dividend from your investments? Equity Funds are for you.
With Mutual Funds, you can customise your funds to suit your needs. Mutual Funds provide tailor made solutions to every goal and objective that you might have.
Your dreams and those of your loved ones are precious and deserve to be fulfilled in the best possible manner. With Mutual Funds, make that dream a reality today. Taking one step at a time, you can easily lay the groundwork of a better future with just a few clicks.
Author: Samant Sikka-Chief Dreamer & Founder, Sqrrl.in
This piece has been written by Samant Sikka, Chief Dreamer & Founder of Sqrrl– a personal finance, fintech venture targeted at young Indians helping them improve their relationship with money ultimately helping them Save, Invest & Prosper!!
Samant has been a student of financial markets & human behavior for 20+ years helping investors, institutions, and advisors. He has vast experience across Strategy, Sales, Business Development & Advisory Roles with stints at Axis Asset Management, Goldman Sachs, Franklin Templeton, AIG, andDarashaw& Company.
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