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Investment Planning
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What is investment planning? |
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Financial planning is nothing but an assessment of your goals and the steps you must take to help make them a reality.
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What you first need to figure out..........
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What is it that you want?
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Is your wish to retire with a sound
lump sum amount or do you want a steady monthly income. Is your son's education or daughters' marriage worrying you? The key is to figure out your goals.
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Where is your money going?
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The most important thing is that you should where your money is going. Zero on your monthly and annual expenses.
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Why should you invest?
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You should invest so that your money grows and shields you against rising inflation. If prices rise by four per cent annually it would not be sufficient if your savings only give you a return of three per cent. It leaves you with a deficit of one per cent. The idea is that your rate of return on investments should be greater than the rate of inflation, leaving you with a nice surplus over a period of time.
Whether your money is invested in stocks, bonds, mutual funds or certificates of deposit (CD), the end result is to create wealth for retirement, marriage, college fees, vacations, better standard of living or to just pass on the money to the next generation. Also, it's exciting to review your investment returns and to see how they are accumulating at a faster rate than your salary.
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When to Invest?
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The sooner the better. By investing into the market right away you allow your investments more time to grow, whereby the concept of compounding interest swells your income by accumulating your earnings and dividends. Considering the unpredictability of the markets, research and history indicates these three golden rules for all investors.
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Invest early |
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Invest regularly |
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Invest for long term and not short term |
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