5 Things You Need to Do Before Investing Your Money
Prepare a Budget
This is the first step before you plan any investments – prepare a budget and manage expenses. You need to calculate your investible surplus, after accounting for your household income and all expenses. For budgeting, list down all your sources of revenue, monthly costs and allocate your money wisely. Include everything from groceries to gas expenditure and loan EMIs. Break down your quarterly, half-yearly or annual figures to a monthly basis for a clearer view and analysis. This will help you manage monthly expenses easily.
Build an Emergency Fund
Clearing High-Interest Debts
If you have taken a personal loan, the interest rate may vary depending on your credit score from high single digit to high double digits. On the other hand, credit cards may charge you even higher interest rates on your outstanding unpaid balance after the free credit period and may levy a penalty too.
If the profits you get on your investments are less than the interest you pay on your loans/unpaid credit card balances, it's certainly not a good investment. In other words, if your returns are 12% and you are paying 14% interest on a loan, you are losing money. Instead of investing, the money could be used to pay off debts so that you become debt-free. ¹
Draw up a Plan for Reaching Your Goal
It is always a good idea to have life goals planned before
Make a list of your objectives and prepare a plan to attain each one. Remember that goal setting is just one aspect of the whole financial planning process, which includes achieving life's objectives via financial management.
Evaluate Your Risk Profile
Everyone's risk tolerance varies depending on their age, financial
As you move towards financial security, you should thoroughly understand how to plan, prepare and then invest your money. When it comes to investment planning, most people approach financial advisors for professional advice and strategies on how to be prepared before they begin their investment journey.
All the Mutual Fund investors have to go through a one-time KYC (Know Your Customers) process. Investor should deal only with the Registered Mutual Funds (RMF). For more info on KYC, RMF and procedure to lodge/redress any complaints, visit https://www.pgimindiamf.com/ieid.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY. Read more