Saturday, September 6, 2008

Investing is a Plan not a Procedure

A few questions that I keep hearing from my investors are:

How can I get high returns with low risk?
Will I start getting benefits from day one?
Doesn’t it take just money to make money?
What’s best - ULIP, stocks or Mutual Funds?

Investing means different things to different people. And, if I can say it, it takes more than just money to make money, to make you rich investor, and make you wealthy.

You might have heard stories like “my friend bought at Rs.5 a share & its now Rs.50/share” or “my friend took ULIP and is not doing well as he invested in equity”

Such stories or hot tips do no favor to you and might just end up frustrating you more! While it’s important you know all this, make sure to validate whatever you hear!

So friends,
investing is a plan not a product or a procedure. Here is some thought on how to kick start the plan

Firstly, know your financial goals in life and define them
Example: Marriage expenses, New house,Kids school...etc.define the time span 

• Understand where you are now & where you want to go (financially… :))
Example: Present investments, monthly saving, bank balance..etc. know the gap between your goals & Present situation

• Know how much risk you can take – to avoid sleepless nights over your investments

• Then, sit with your financial planner and prepare a personalized plan

• Finally, journal your progress regularly to ensure that you are on track.

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