It is quite sad, literally to experience certain unwanted assets being forced upon just for the fact the company needs to sell it or they find you as a customer who has enough to pay for it. If you are a person who might just be experiencing a situation where a housing loan company gives you or rather forces you to buy something much more than what you require, it is important that you put your foot down and deny the offer firmly.
In most cases, it has been observed that, investors do not know the value of such assets and continue investing just to keep up a positive relationship with the lending company. However, if you run out of good luck and the so called asset performs badly, you are on the risk of losing out your investments. Opting for debt like loans, personal loan etc will be the avenues you might have to opt for in order to fulfill your financial requirements. If that is not the ugly scenario you want to face or imagined, then prudent financial decisions is what you are required to know.
Apart from this, the other way by which you need to avert yourself from any kind of uncertain events, is that you need to track your investments. By tracking your investments, what is meant that you need to re assess and re value your portfolio at least once every year. Reassessing your portfolio requires you to keep a track on the performance of funds in which your savings are invested. Opting for the SIP route will enable you to stop investing in those funds that are being under performers-only if that particular fund in which your investment is made is for a short term period. But if it is a long term investment, it is best advised to stay put and not move out of the fund since such discrepancies are bound to last only for a short term and are bound to be corrected in the long run.
One of the most important points, that you as a prudent investor needs to know is that, it is very important for you to have due patience when it comes to investing in money market instruments like the Mutual Funds etc. No fund can guarantee you overnight success. Also those funds that have a good performance record can give you negative returns if you withdraw your funds before the required minimum time limit. All money market assets demand an investment period of at least up to 3 years in order to fully benefit from the market cycles.
Factoring in inflation is also another important point that you need to keep in mind. Most investors just look at the rate in which their returns can grow but neglect to factor in inflation which makes your portfolio of lesser value. You need to consider as to what can be the rate of inflation when you’re the tenor of your funds mature and compare the then inflation rate with the rate of return on your investments. With that you will be able to know how much your returns will grow. Neglecting this will only reduce the value of your returns since you will have to shell out more money in order to finance your requirements.
These are some of the few basic points that you are required to understand if you wish to build your portfolio and in order to build your corpus to a good limit. It is not that difficult to build a corpus that is worth Rs 1 crore in the next 15-20 years but it is how much, where and when you invest is all that that matters.