We invest to safeguard ourselves for a rainy day. If you’ve just started investing or want to start, then you could use our 7-step plan to become your own investment consultant!
Managing your investments becomes easy when you make it a habit to save, even if it’s very little money. You need to keep a meticulous account of personal income versus expenditure on a monthly basis before you start investing.
Here are some steps you can follow:
Step 1: Create a budget and track your expenses
A budget helps you identify problem spending areas and also helps regulate your cash flow. Tracking your expenses against the budget helps you control spending and free up cash to clear existing debt and save for retirement or your child’s education. For example, your budget allocation includes a certain amount for groceries for a week. You discover on comparing that amount against actual expenses that you have overspent on buying additional items that you did not really need. This will caution you against making similar expenditure next week and at the end of the month, you will end up saving money!
Step 2: Pay off your existing credit card debts
Are you surprised that paying off credit card debt is a step towards investments? Credit cards charge a high amount of interest along with the principal repayments. When you clear this amount, you‘ll be glad to realize that all the interest amounts and late fees you paid to credit cards can be utilized for your savings and investment program.
Step 3: Save effectively for a rainy dayEmergencies often arrive unannounced. Ensure that some money is set aside to cover monthly expenses for at least three months. These funds should be invested or set aside in instruments that can be readily accessed should you need cash. For example, keep these funds in a savings account in a bank or invest in a money-market unit trust fund.
Step 4: Design a disciplined savings program
You can open a recurring deposit account. In this case a particular amount from your income gets deposited every month for a fixed tenure. You can also invest in a series of fixed deposits (FDs). For example, if your cash reserve is RM 24,000, this amount can be divided into six FDs of equal amounts, each with a 6-month maturity. At the end of 6 months, you’ll have a fixed deposit maturing every month. You can continue to roll them over to create a source of regular income and minimize risk.
Step 5: Invest in an insurance plan
choose the company that can give you a good coverage with the minimal annual premium.the most important INSURANCE you should take :-
1) Medical Card - for hospitalizations & operations purpose
2) Death - to pay all your debt upon your death or to present to your loves one
3) Disability - to support the whole of your life if you are disable
4) Critical Illness - to support your expenses upon your Illness. example - cancer, heart attack, coma, blindness, benign brain tumor, paralysis etc
5) Personal Accident - all Malaysian driver are recommended!!
Check out!! Have you completely cover yourself or your loves one?
Tips!!- choose the company that offering you with a very minimal premium with the maximum of coverage.-
example (the existing product) : average ANNUAL premium RM 200-400 with the coverage around RM 100,000 - RM 250,000.- if you paid around RM 200-400 / year you are SAFE!!! don't waste your money with a little coverage.
THINK before you make a decision!!!- the separate/term insurance are more advisable compare to package of insurance/insurance+investment(not advisable).
Look for purely insurance.- if you seek for investment go purely for investment.
DON"T BUY THE PACKAGE!! it will cost you a lot!!!-
CHECK OUT WHAT IS YOUR NEEDS!!!
Step 6: Buy yourself your dream home
Investing in a house is one of the best investments you can make. First, your payments towards interest and real estate taxes are tax deductible. Second, your property increases in value over time.
Step 7: Invest in a diversified investment program or systematic investment planYour risk tolerance level goes a long way in defining your investment approach. If you’re not averse to taking risks, then you may want to invest in an equity based mutual fund. Else, you may want to invest in a plan that involves bonds and other safe securities. Also, ensure that you keep in mind your investment objectives before you subscribe to an investment plan
No comments:
Post a Comment