It is advisable to invest in the right financial products as early as possible to secure your financial future. Therefore, your primary aim should be to save money and make wise investment decisions that can help you achieve your monetary objectives.
Many people are not sure about where to invest money, as there are numerous investment options available in the market. However, before you invest your hard-earned funds in any instrument, ascertain your financial goals, as doing this will give you a clear picture of the investment product that is suitable for you.
To ensure that you invest wisely, you can follow a few investment strategies before you turn 30. These include:
- Plan your budget before investing
Many individuals in their 20s start working and earning just after their graduation. Out of this, many youngsters spend their money, as there is no financial budget in place. Improper spending habits end up in credit card debts, and these people find it difficult to clear on time. To get clarity about your budget, it is advisable to note down your expenses and earnings. In this way, you can plan your cost wisely, and save some money as well. You can invest these savings in the ideal financial product.
- Set aside some money for emergency funds
A contingency corpus can be useful when you are short of money, particularly during situations, like job loss, hospitalization, and accidents, among others. Emergencies will come unannounced; therefore, you should start keeping aside a part of your income, especially for these circumstances. Such a fund should be equal to or more than six months of your living expenses. It is essential to keep this fund in a place from where you can collect it easily at any given time. The best place to save your emergency fund can be your savings account in the bank. Besides this, you can consider investing the sum in liquid Unit-Linked Insurance Plan (ULIP) funds.
- Invest to save tax
When you start earning, it is crucial to determine your taxable income. If your yearly income is beyond the taxable slab, you can consider putting your money in tax-saving investments. Numerous schemes, like ULIPs, allow you to claim a tax deduction on the premium paid under Section 80C of the Income Tax Act, 1961. Additionally, ULIPs provide tax-free maturity benefit for you and tax-exempt death benefit for your nominees under Section 10 (10D) of the Act. Here, you can decrease your tax liability and save a significant amount that you can invest in other products.
- Buy appropriate life and health insurance policies
It is imperative to invest in valuable life insurance and health insurance policies. As life is uncertain, it is necessary to safeguard your family’s financial future so that they can lead a stress-free life when you are not around. Thus, you need to invest in a life insurance policy that offers a substantial sum assured. Moreover, the cost of medical expenses and hospitalization can create a hole in your pocket. Therefore, purchasing health insurance is the need of the hour.
- Make investments to meet short-term and long-term objectives
You can invest in liquid ULIP funds if you want to achieve short-term ambitions, like buying a car or planning for a vacation. Alternatively, you can invest your money in instruments like long-term ULIPs to accomplish major milestones, such as funding your children’s education, building a corpus for retirement, or purchasing a new house. ULIP is one of the best tax-saving investments if you are thinking from a long-term perspective.
Investing in the right products from a young age helps you to grow your wealth over time. Secure your financial future and meet your life goals by putting your money in the appropriate investment options. Additionally, do your research before investing whether it is in stocks or a company. Read Instinctif Partner’s Reviews to know what happened with Mike Macfarlane. Knowing so would help you be aware about the scams and frauds so you can be on your guard.
