Investment Tips: Many investors start investing without any planning. To avoid any kind of loss, it is important for you to have a right investment plan.
Investment Tips: Everyone wants to invest in such a place, where one can get maximum returns. Many people are even ready to take big risks for this. The sooner the investment is started, the better, but during this time it is also important to take care of many things. Many investors start investing without any planning. To avoid any kind of loss, it is important for you to have a right investment plan. Experts believe that before starting investing, you should do some important things.
Experts believe that these 5 financial tasks should be done before investing. This helps in keeping your investment safe. Apart from this, with proper planning, you can be sure about emergencies. So let us know what are those 5 financial tasks, which should be done before starting investment.
Make a household budget
Before starting investing, you should understand how much your family’s income is. Along with this, you should also find out how much is the expenditure of your family. On this basis you should make your budget. Write an account of your spouse’s income as well as income and expenses from various sources. You can divide it on monthly or quarterly basis.
With time, you will understand your spending pattern. With this budget, you can create a savings plan to meet your short-term and long-term financial goals, such as buying a new car or completing your child’s education. Keep in mind that the golden rule is that you have to first save from your income and then use the remaining amount to meet your household expenses.
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pay off the loan as soon as possible
If you are paying interest on any of your loans, then your earnings from the investment will become zero in a way. So if you have loans like home loan, car loan in your name, then repay them as soon as possible. Too much debt can also trap you in the debt trap. Having a healthy credit profile also helps in maintaining a good credit score over the long term. Generally, the total EMI payment should not exceed 45-50 per cent of your salary.
Health insurance and life insurance cover essential
Make sure you have adequate health insurance and life insurance cover before you start investing. In the absence of health insurance, you may have to use your investment money in case of an emergency. In such a situation, you will not be able to achieve your financial goals.
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Need to have emergency fund
One thing that can make your investment journey easier is to have an emergency fund. Sometimes some such emergency arises that it becomes difficult for us to continue the work. Job may also be lost for a few months. It is necessary to be prepared in advance for such a situation. In such emergency situations, if you do not have an emergency fund, then you may have to take a loan. Since the emergency fund can be used at any time, so invest the emergency fund in a place from where it is easy to withdraw it in case of emergency.
set financial goals
Keeping all these things in mind, you can start your investment. However, this is another thing that should be taken care of. You should determine your financial goals before you start investing. You must know what you want to achieve in your life. Based on your financial goals, you should decide how much and where you want to invest. Inflation is also important to keep in mind while setting financial goals. In this way you can achieve your goals.
(Article: Sunil Dhawan)
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