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5 key investing advice for individuals to follow for a secure future

People are ‘extremely cautious’ when it comes to ‘investing’. Saving and investing are two flip sides of the same coin. However, there’s a big difference in what each of the two provides. Savings is keeping money aside for emergencies which offer negligible or no rate of return. On the other hand, investing is a systematic approach towards possible wealth creation. Investing in market associated financial asset classes may help to beat inflation, grow your corpus over the years, and prepare you for your future goals.

Asset Allocation
One must have a financial portfolio, with an essence of all financial asset classes in it. Financial portfolios may include mutual funds apart from other asset classes like equities, debt, etc for better asset allocation and diversification, regular contributions to the NPS and Public Provident Fund account for safeguarding retirement planning. Regular pension for life, besides having adequate health insurance and life insurance is also important.

Documenting the Financial Plan
Financial literacy is crucial if you want to invest and get wealthier. For that, you need to take an interest in learning about new financial tools, take every opportunity to know more about the different instruments in the market along with the kind of risk-rewards they provide and plan your finances accordingly. It is also of significant importance to mention here that one may get a financial plan made as a document and they must implement it and keep rebalancing their portfolio by reviewing it at periodic intervals. Documenting keeps a track of the past returns and investment with the current ones.

Many people have a special fondness for gold. One may invest in gold either in the form of physical gold (ornaments) or in the form of digital or paper gold (gold mutual funds, gold ETFs & sovereign gold bonds, etc.). One can choose their desired option and start investing accordingly.

Retirement planning
One must start planning for retirement as early as possible in life. Retirement benefits should not only be used for expenditure but should invest/ reinvest for lifetime to reap the benefits in future. Together with safeguarding the family members, one has to strategize for their retirement requirements well in advance. Please be aware of the fact that, it is not static that one who is working will retire at the age of 60. Retirement will depend upon their personal and professional needs and priorities. Henceforth, they need to do extraordinary and distinctive planning for early retirement and make sure that they have all the resources that are apt for them to live comfortably for the rest of their lives. This can be done by building a corpus and by investing and capitalizing your resources in different asset classes: real-estate, equity, debt etc.

Emergency investing
Always keep emergency funds so that you need not rely entirely on the long term investments for emergencies. Early withdrawal may come along with a very huge opportunity cost. Investing on a regular basis helps you in building a significant corpus for yourself. These not only support you in achieving your objectives and goals but also provide you with a backup plan to rely on in case of emergencies.

As an intellectual investor, you need to be knowledgeable about the market and diverse investment tactics. You can grow your wealth and achieve your financial goals with ease by making intellectual investment decisions.

Views are personal: The author – Pankaj Ladha is Mutual Fund Distributor from Kota

Disclaimer: The views expressed are of the author and are personal. TAMPL may or may not subscribe to the same. The views expressed in this article / video are in no way trying to predict the markets or to time them. The views expressed are for information purpose only and do not construe to be any investment, legal or taxation advice. Any action taken by you on the basis of the information contained herein is your responsibility alone and Tata Asset Management will not be liable in any manner for the consequences of such action taken by you. There are no guaranteed or assured returns under any of the scheme of Tata mutual Fund.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Article by – Pankaj Ladha (A Mutual Fund Distributor)