Ankit Agarwal is the Managing Director at Alankit Ltd. He is a qualified Chartered Accountant and as the Managing Director of Alankit Limited, Ankit Agarwal is the chief architect of the company’s value-driven business strategy. Under his leadership, Alankit became a globally recognized e-Governance service provider. With over 11 years of experience as a visionary entrepreneur, Ankit has been leading business operations in multiple sectors from high technology to the Government and Fintech sectors.
Investing should be more like watching paint dry or watching grass grow.” Investing is paramount to achieving your goals. It is the only way to make you future-ready. It is through the investments; one saves and accumulates a corpus for a rainy day. In addition to that, regular contribution to investments compels one to regularly set aside an amount this inculcating a financial discipline in oneself in the long run.
Key Factors to be Analysed Before Investing
Certain factors affecting our investments are still overlooked or unknown to a dilettante. Initial planning requires a detailed understanding of the following factors:
- Risk Tolerance Level
- Investment horizon
- Liquidity requirements
- Real Rate of Return
- Tax implications
- Existing assets & liability evaluation
- Other personal & professional situations if any
Among the above factors, Inflation is a key one. For a layman, inflation can be characterised as a persevering rise in the overall cost of goods and services of everyday use – like clothing, food, fuel, transport, and so forth – which builds the typical cost for living. For assessing any investment we should assess the tax-adjusted genuine pace of return.
- Nominal Rate of Return: The gross return that you receive on your investment
- Real Rate of Return: Return received on the investment that you receive after deducting inflation or inflationary cost
Start Early Wealth Planning-
A poorly designed plan is still better than no plan at all. It is highly recommended for you to seek suggestions from a professional in order to develop a sound wealth plan that will go a long way in building a corpus in the future. The best time to meet a wealth manager would be right after you join your first job. Based on your personal and professional goals she or he will formulate an achievable financial plan for you.
Create a Contingency Fund-
The Covid pandemic brought a sea change in our perspective about life and financial backup. It was economic chaos across the globe when the pandemic was at its peak. People lost their jobs, Industries closed forever, companies went bankrupt and economically weaker sections suffered the most. During these tough times, people approached their kith and kin for financial assistance. However, some people faced severely difficult phases of the financial crisis during the first and second waves of COVID-19.
Therefore, it is prudent to set up a contingency fund that should be identical to your yearly compensation or salary. One could keep an overdraft facility against Mutual Funds to get quick and instant liquidity in the midst of earnest monetary requirements. This asset will protect you against future exigency.
Invest for the long term –
Rising inflation has made conservative investment themes completely obsolete. For that reason, it is recommended to make strategic asset allocation of your hard-earned money into long-term and sustainable investments that generate better returns to overcome diminishing purchasing power.
Improve financial discipline
Current marketing initiatives compel people to increase their spending on unnecessary impulsive purchases and become a part of your perennial Credit card debt trap. It’s time to alter this habit and bifurcate your expenses into Necessities, Needs, and Luxury expenditure.
Most of us spend first then save and end up investing the remaining, whereas, successful and rich people first plan consistent expenditure on necessities and important needs than their investments. They don’t indulge in extravagant expenses on luxury elements that are beyond their budget.
Let your money work –
Money can do miracles for you if we channelise it in the right direction in a rational manner. Seeking advice from certified wealth advisors to reap the full potential of your money is always the right move. Whether to create a better return or to optimise the financing, various methods could make your money work more effectively for your glorious future.
Always Consult with a Professional
If you don’t comprehend investments, it’s advisable to consult a certified wealth professional. It is always wise to make investment decisions based on subject matter experts’ advice than relying on voluntary resources such as TV shows, friends, and family.
Don’t Time the Market
Some people try to time the market and end up losing the Principle too. It’s not the timing but the investment horizon with concrete financial and investment discipline that is necessary to achieve good returns.
By investing in the superlative investment options in India, you can accomplish your monetary objectives as well as make a financial cushion for the future to carry on with a protected or secured life. This is the motivation behind why investors are generally looking for top growth investment plans and strategies where they can increase their money according to their risk appetite.