INSUBCONTINENT EXCLUSIVE:
You slog to make money for yourself
But a day is limited to 24 hours and there is only so much work that can be accomplished during the waking hours
And there are countless ploys of snatching your hard-earned income, ranging from taxation and inflation to a consumeristic culture
But what if I tell you that you can make money when taking a nap or enjoying a vacation? Money well-deployed will be busy generating wealth
and beefing up your net worth, when you are nowhere in the picture
Welcome to a new world of financial independence.According to Ankur Choudhary, co- founder - CIO, Goalwise.com, the first step in making
money work for you is to save and the best way to save is to save first and spend later
The second step is to invest your savings so that they can earn interest or profits
Some of the investment avenues are FD, real estate, mutual funds and stocks
FDs and Mutual Funds are suitable for investing small amounts of money on a regular basis, while PPF, ELSS, etc
help in saving taxes under section 80(C).Invest SystematicallyA successful investor is a systematic investor
Behavioral Finance has shown that investors are generally irrational, emotional and rash when it comes to making investment decisions
Putting investing on automated mode seems to be the only way out of this conundrum
With an automated Systematic Investment Plan (SIP), a person can allocate a fixed amount of money each month to a financial instrument of
choice, thereby taking away the emotion from investing
SIP also has the added advantages of allowing the investors to start small and insulating them against market fluctuations.Harsh Jain
Co-founder and COO Groww, said the best way to make money work for you is to invest in avenues that fetch inflating beating returns such as
Equities have the unmatched potential to generate wealth in the long run
For a time horizon say 15 years, if you invest in a diversified equity portfolio by starting a SIP of Rs 20,000, at 10% expected annual
returns, your planned investment amount of 36 Lakhs can help you amass a corpus of approximately 80 Lakhs, which means your money earned a
profit of about 44 Lakhs for you.Harness Power of CompoundingAlbert Einstein, one of the greatest scientists of all times, has said that the
Power of compounding was the eighth wonder of the world
Compounding grows wealth exponentially by adding the profit earned on a stock or a mutual fund to the principal amount and then re-investing
Many stocks have delivered mind-boggling returns to investors willing to allow 'time in the market' rather than attempt to time the
market.Go for Value InvestingBenjamin Graham is known as the father of value investing for his path-breaking book, 'The Intelligent
Investor.' Berkshire Hathaway CEO and legendary investor Warren Buffett described it as the best book on investing ever written
Graham's investment philosophy, as outlined in the book, consisted in making investment decisions based on the intrinsic value of a stock
If a stock's intrinsic value, as determined by its assets, earnings and dividend payouts, was more than its current market price, the
stock was a screaming buy for Graham
So value investors are basically bargain hunters who search for undervalued stocks, or valuable stocks that are yet to be discovered by
other market participants
Moreover, they invest in businesses rather than stocks per se, and in businesses that they understand
Warren Buffet and Rakesh Jhunjhunwala have built fortunes by taking the value investing approach.Have a Diversified Approach'Do not put all
your eggs in one basket' is a sound and timeless piece of investment advice
An investment portfolio should consist of diverse financial instruments such as stocks, bonds and other investments, taking into
consideration immediate and long-term investment goals.High Dividend StocksA portfolio of high-dividend stocks can bring in regular passive
income and at a higher annualized rate of interest in today's low-interest rate environment
In the Indian context, some of the PSU stocks have a history of proving high dividends
And as high-dividend stocks are ultimately stocks, the potential for capital appreciation still remains.Invest in Index FundsStock investing
may not be every one's cup of tea, given the daily market gyrations and the real possibility of wealth erosion
An index fund is basically a mutual fund that imitates the portfolio of an index
For example, the portfolio of an index fund that tracks a benchmark such as Nifty would have its 50 constituent stocks in different
The returns mimic the underlying index, thereby providing for diversification in asset allocation, minimizing the risks and making money in
the long run.The adage 'Money doesn't grow on trees' may not be relevant, at least in some situations
Money can be made to generate more cash, depending on one's financial approach, risk appetite and time horizon.Get Breaking news, live
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