“Investing is a challenging game and we are all into it at some time or the other. The clearer we are about it, the more successful we will be at mastering it”.
In contrast to the above phrase Mr. Parikh convey that if we understand the investing than we would be successful.
Rather many of the investors wanted to make their investments in a way that they want returns like a skyrocket in a quick time, even without losing their principal invested money. So, they went to the advisory, planners or select top investments. Here they get assurance, they can double their money even without losing their principle in a few months or years.
Even more, they always fail to remember that there is such no investment where there is no risk involved. As a matter of fact that risk and return are interrelated, i.e. “higher the return, higher the risk”. So, while selecting or planning investments you should always watch your needs as well as your risk-taking capability. [Read also: Saving and investing]
Above all, building an investment plan is just not putting your money in good stocks or buy some good funds. You should consider your current situations, your goals or your risk-taking nature.
If you are at comfort level ‘A’, and you wanted to move at comfort level ‘B’, you require some investing tools. With the help of these tools, you can achieve your goals which help you to reach your comfort level ‘B’.
Please clear your mind that investment planning begins when you are clear on your financial goals and objectives.
Here are some tips that help you to Build an Investment Plan which leads you to be rich:
TIP-1 # Set Pragmatic Goal Approach
First of all, for investors who start investments or thinking of it should start with:
What do they want in their life?
What are their goals?
And what they want to achieve?
Every middle-class person has some common goals: required money for college education, marriage, own house or retirement. Every goal comes at its own time and with challenges. So, you should set realistic goals instead of saying – “I wish for an adequate amount of money to retire comfortably”.
Similarly, think about how much money you will require for your goals. To accomplish your goals always keep in mind country economic growth and inflation rate. If you ignore this you may found your “Lacs of money become thousands” in quick time in your bank accounts. You will never get an idea about this. [Read Power of Compounding]
TIP-2 # Evaluate Yourself to Save Monthly
Probably for a salaried person, any investment they want to start should save some from their salaries to accomplish goals. Every person knows how much they can save from their salaries every month. Instead to spend on expensive clothes, phones or lavish parties, always better to save for your investment that leads to your goal.
I am not against the parties, expensive clothes or phones but it doesn’t make sense to spend too much on things which you really do not require. Warren Buffet once said
“If you buy things you do not need, soon you will have to sell things you need”.
TIP-3 # Select Investment Strategy
There are numerous ways of investments to achieve your goals. “To better understand please read – Why you require an investment?” You have to make some strategy that suits your pocket to achieve the goals you decided. The best way of investment in today’s world is the stock market.
Furthermore, the Stock market is quite risky but the returns are also too high. The best results in the stock market come out to be in the long run only.
The below picture clearly shows the outperformance of the Equity market.
TIP-4 # Follow your Developments
Finally, whenever or wherever you invest money, you should keep your eyes on goals as well as on your investments. Get your goals to achieve on-time you should keep track your investments timely. Either they are going to give you enough to achieve goals or not. If not, think twice, change your strategy immediately and move in the direction to attain goals.
In a nutshell, it is better to set a goal to achieve something. Tony Robbins said,
“Setting goals is the first step in turning the invisible into the visible”.
The above representation gives you an idea of how to make a plan for your financial needs. Setting up your goals and how to follow your strategies to be financially independent. [Check Are you Financially Educated?]
Investing is not a product or procedure; it is a very personal plan of your life. You have to decide what your goals are and how you can go from one level to another. There are some resources that are coming in your way and also have some commitments as well, which you need to full-fill on time. So, building an investment plan is very crucial, hence, you should have a clear picture of your financials, your goals before making your plans.