Most investors think that there is a particular time for investing to secure your financial future or for achieving any financial goal. But this statement is not always true. When you realize you have a goal that is at least 3 years away from now, you need to start investing.
For example, if you had decided earlier that you need to gain some work experience first and then plan to do your master’s later, is a goal that is quite common amongst youngsters. If you are one of them who is working now and decide that you need to pursue a higher education degree say in 3-5 years, either abroad or in your home country, without the need for any kind of loan be it a personal loan, gold loan etc, you can easily do so by starting to invest in funds that provide you the required growth with the enough amount of protection so that you can get your desired returns without risking much. All you need is a proper financial guide that can help you achieve your dreams without many hassles.
The first thing that needs to be calculated is the taxable income. If you are working, as a responsible citizen of this country, it is obvious that you have to pay taxes. In order to formulate a proper investment plan, we need to consider the income that is left after you have paid your taxes. Considering you are a fresher, you might not be included in the highest tax bracket. Therefore it is only a reasonable amount that is being taxed away. So there is a lot that you can do with the rest of the amount. Save a part your funds into Fixed Deposits (FDs), long term bonds or an even better option, Fixed Maturity Plans (FMPs). Long term in this case means saving your funds for a maximum duration of 5 years.
Next step is to invest into equities that can give you good returns. The best way of investing in equities is through Mutual Funds (MFs) using the Systematic Transfer Plan (STPs). Invest in STPs over a period of 6 months after which the fund will automatically transfer your funds in to a different category of assets as chosen by you. You can consider getting your funds transferred to liquid funds and short term funds. This can be done when you are at least a year away from your goal.
Once you have managed to give a good structure to your portfolio and have exposed the right amount of your funds towards equities and debt, you need to review your portfolio at least once in a year. Since you will be taking a Systematic Transfer Plan (STP), it is better if you could review them at least once in 6 months. This will keep you away from the possibility of getting into a credit risk as you will be aware of how the funds are performing. Since the funds will be saved only for a period of 5 years (approx), it is important that your investment does not go through rough market patches, which can adversely affect your returns. In order to safeguard yourself from any such unforeseen circumstances, you need to review and re assess your portfolio.
Also it is very important that you choose a good financial advisor who does not look out for selling policies or funds of companies that you don’t actually require and also carry a high commission to be shelled out from your pockets. Be aware of the market functioning, and choose those funds that do not carry heavy processing fee or exit loads as this can reduce the overall returns on your investment. Remember it is never too late to start investing.