Given below are few tips and tricks for beginners to help them with right investment decisions at the beginning for their careers.
Planning
Set your objectives for investments, set a timeline to fulfill these objectives. You don’t need a concrete plan to begin with. But setting goals and segregating them priority wise- needs/ wants, high/low/mid, timeline for these goals- short term/mid term/long term will help you plan roadmap to your investment.
Always diversify your portfolio
As the saying goes, Do not put all your eggs in one basket, always keep your funds in multiple types of portfolios. This will help spread your risks, improve chances of more returns, will safeguard your investments.
Few options for mixed portfolios are For Low risk-deposits, government schemes, debt funds such as liquid funds and short-term funds, For Mid risk- bonds and hybrid funds, For High Risk-consider stocks as well as equity.
Always plan for your retirement
Whatever age you start earning, you should start planning investment for your retirement. The early you start, the more stress free you are at time of retirement. The compounding interest and returns allows you to start with smaller amounts that you can save towards retirement.
Loan/Debt
The Income-to-EMI ratio should ideally be close to 35 to 45 % and never higher. Always follow the thumb rule-Never borrow on your depreciating assets. Always manage debt smartly, always first pay off the most expensive debt for a moral boost and also for a feeling of accomplishment.
Always pay your credit card bill in full, the interest and hidden charges credit cards levy can give you nightmares later
Asset/Liabilities
Always keep a track of your assets and liabilities. Always maintain an ideal positive networth (Assets- Liabilities). Always purchase assets that are lower in maintenance and can give you high returns, for e.g. property.
