We’ve all been there once. With earnings from our first job chiming in month after month, we loosen our purse strings to enjoy the fruits of life over the short term. Good food, parties and maybe even a ride – nothing seems out of bounds anymore.
A sense of prudence does eventually set in, and we look out for intelligent saving and investment avenues to make a portion of our cash grow over time.
If you’re at this stage of your financial life and career, you’re very much treading the beaten track. Here are some handy pointers to make sure your hard-earned money is channelled in the right direction so it can serve you well for years to come.
Before you get started with investing in the conventional sense, do make sure that you have sufficient funds in your bank account that you can access on a rainy day. Typically, you are advised to save enough money to cover your expenditures for at least a three to six month period. Remember to steer clear from making long-term deposits with this crucial buffer. Fixed Deposits or liquid Mutual Funds are ideal to help you build this fund.
Do not dive headfirst into the wide world of investing with a large corpus. As it is a learning phase, begin with small chunks of your savings and proceed slowly. Once you have enough confidence in your ability to commit to the swings of various investment instruments, you can increase your allocation and take educated risks if you have the appetite.
Think Long Term
Devise a sound strategy and always consider the long-term effect of your savings. Do not expect magnificent results from the first day. It is quite possible that you may even lose money when you start out, but investing with discipline and regularity will be the factors that determine your success in long-term wealth creation.
To make sure your investments aren’t derailed, do pick up comprehensive Life Insurance and Health Insurance products that suit your needs. Not only are they low-cost options over the long-term, they also offer a gamut of Income Tax benefits that in turn free up yet more funds that you can choose to invest.
As a first time investor, do not worry about getting everything right. As long as you are following the basic rules, you will learn and save enough on the way to fulfil all your long term goals in a predictable fashion.