Unlock the smart investment strategy: Tricks and Tips
Changeyourrule.com
: What you do with your money? Do it grow or do the value decrease? What is your planning in future to grow your money? Do you really worry about the savings and grow of your money? Then let you are in the right place. There is a big difference between saving money and investing money. If you want to save money then it only for not spend money unnecessarily, where as when you want to invest money, it for the purpose of growing your savings. The most important part is diversify your money to different aspects.
Let us understand the character of savings
For example a person earned 50k per month and there are expenses list of her/him.
- House rent/Maintenance:
- Food
- Electricity
- Medicines
- Education for kids
- Emergency Need
- Miscellaneous
A person has many expenses list in a month. Most of us do save money after all expenses. But we should make our saving a part of our expenses. That is the Rule of 30-50-20.
The 30% of our income should be saved and with the saving how much investment and saving depends on your needs. 50% for daily expenses and necessities. 20% for our luxury and entertainment. If we follow this rule there will be less financial difficulties we will face in future.
What is the saving part included:
- Health Insurance
- Life Insurance
- Short term Recurring Deposit /Long term RD
- PPF for salaried person
- Sukanya Samridhi Yojana for girl child
- Mutual Fund investment (Equity fund-Nifty 50 Index fund)
You should diversify your savings and investment. Health insurance must for a hustle free medical expenses if needed in future. Life insurance for your dependant who financial depends on you like old parents without financial freedom, dependant kids and other family members. Short term RD or deposit for a particular period of time is need for immediate or nearby expense like children education, family party and function. Long term for saving money in emergency situation. It depends on your situational analysis how much you want to save for what ground and purposes.
If you are a salaried person and your company does not provide you EPF you have the great option to for Public Provident Fund at any Nationalised Bank or post office. It has lock in period of 15 years. And the interest we get from PPF is tax free also. SSY for those who have a girl child. You can put 500 to 12,500 per month in this account which is also tax free and you may put the money for higher education and marriage purposes of your child. You can withdraw the money after 18 years and maximum 21 years for maturity.
Apart from all of this you have to take some risk to grow your money in mutual fund. Putting your money in Nifty 50 or index fund is much safer than other. There is less chance of negative return. However you have to give tax for your gain. But it is ok if you get at least 12/15% interest which is compounding at the end you definitely have a good corpus. For investing in mutual fund you need to be educated for this. Here being educated means having the clear idea about the market scenario and mutual fund regulations. The first phases for saving your money and the second phase for investment.
Strategies your basic needs then second expenses then your entertainment and luxurious items. If you think you can cut from your extra expenses then you should do it. The more you save the more you enjoy. Otherwise if you spend more in early you have to suffer more in late. So, focus on a retirement plan so, you can be independent at least after 60.
How to manage expenses:
Cut down from scroll shopping habits. What is scroll shopping? It means when you browse internet and find some ad and get into the webpage to shop the item even if you don’t need it. Don’t be trapped by the offer based seasonal shoppings. If you really need something do buy these things only. Enlist the items in your house which even you never you use since weeks before. These are unnecessary items.
Strictly follow the rules of saving and do it in a disciplinary manner. On annually add money to your saving and investment. It help to adjust the inflation.
First save then expenses. How much money you earn that is important however, how much you save that is more important. How we prove this let us listen a story:
Mr Haris and Mr Gulkit are two friends . Mr Haris have a job in a multinational company as a manger and getting 1Lakh per month where as Mr Gulkit getting a monthly salary of 50k as a supervisor. Mr Haris Maintain car, own house, daily expenses is more than 1000, luxorious watch, branded dress, shoes, party every month and all. He only invest 10000 per month. Where as Mr Gulkit expenses are vey clear and under 35000 per month. And the rest 15000, he adjusted for saving and investment. You may think what is the big difference if we save 5000 more in a month. Yes it compounded annually. If we save 5000 per month it becomes 60000 per year. And after 10 years it became 6lakh. However the interesting part is that it compounded annually and the 6 lakh may became 10/12 lakh after 10 years, If invested in a right way. So it is most important how much you invest after your expenses. So, don’t think you have less salary than others. Start smart expenses and invest early as soon as possible.
At the conclusion you have to start not to read only. If someone think about smart investment and smart expenses then it is important to start now. There are many online application which are trust worthy you can choose one for mutual fund investment and invest in stock. Natinalized banks and Indian Post also available for savings.
