If you’re a millennial wishing to make investments for a solid financial foundation in the future, then a few aspects regarding money investment plans should also be kept in mind.
Creating a Robust Financial Base
When you want to decide on the best money investment plans, some pointers should be kept in mind.
- Do not delay your investments– Start investing as early as possible, ideally when you’ve joined your job or are a few years into your profession. The faster you start, the better your benefits from compounding-linked returns. It will help you build a hefty retirement or home-buying corpus, depending on your future objectives.
- Cover all the basics– You should not neglect buying a term plan or other life coverage. This should be done first before you start diversifying your investment portfolio. Once you secure your family from a financial perspective, it is vital to purchase health insurance for your entire family too. The next thing to do is create a contingency/emergency fund that should possess a minimum sum of 3-6 months’ worth of your net salary. However, this should be liquid and easily accessible to meet sudden requirements.
- Retirement and Goal-Based Investments– In case there are multiple objectives that have to be met in a certain duration (7-10 years), then there are numerous investment options available. Two of the top picks are retirement plans and ULIPs (unit-linked insurance plans). Both of them have life coverage and returns linked to investments. They also offer tax benefits and several flexible features and benefits. These are often the best choices in terms of getting inflation-beating returns and amassing enough money for your post-retirement needs.
- Spread out your investments in multiple avenues– You can balance your portfolio with a mix of risk-free and moderate/high-risk investments. Allocate some portion for FDs, PPF, NPS and other such options, while investing in ULIPs, retirement plans, equities, mutual funds, and ELSS, to name a few choices.
- Take risks early on- When you’re a millennial, it is the right time to start taking investment risks early on. This will help you weather temporary market storms and build substantial wealth for the future. You can gradually lower your risks and equity exposure once you get older and your priorities change.
These are some investment tips that you should keep in mind for building a solid financial foundation for the future. At the same time, manage your debt wisely and maintain a high credit score as well. Try to keep your credit card debts on the lower side and repay the full amount instead of paying the minimum monthly sum. Do not underestimate retirement planning and saving up for future goals- the earlier you start, the better it is for you. If necessary, you can segregate your investments into different buckets depending on your mid, short, and long-term priorities. On that note, here’s to building a robust financial foundation for a safe and comfortable retirement journey ahead.
