- Actually decide the reason first why you want to invest ?
- What are your actuall goals of your life, decide first , what you want to achive ? You must know the exact answer , why you want to carry on your investments for so many long years?
- Understand the asset allocation that you are comfortable with. Also, understand the asset allocation that is required for each of your goals. Both can be different.
- Asset allocation is a base of wealth creation. You should allocate your investment in various asset classes as per your risk taking abilities. Fixed income products must also be a important part of your wealth creation. It will help you to stabilize risk and returns of your portfolio.
- Start you SIPs in equity mutual funds (and if necessary, debt MFs).
- Do not stop your SIPs. Especially when markets are down. Actually it will help u in accumulate more and more units at lower rates.
- Actually you should invest more money when markets are down , or fall drastically. You should invest more instead when P/E or P/B.V are at low.
- Don’t invest additional money or buy less when the PE or P/BV is high
- When people start discussing that SIP in last few years has given lower returns than bank FDs, consider investing additional amounts.
10 When stock market returns in last few years have not been good, consider investing additional amounts.
- Direct stock investing is tough and not suitable for everyone. You should have enough time, enough money and enough knowledge of stock market and countries economy Understand this.
- Think of direct equity investment only after you have fulfilled above ideas of SIP and Sip top ups during lower markets.
- Focus on increasing your income (if possible, side income too). You can only save or invest a part of what you earn. So increasing your income is necessary. But don’t go overboard or kill yourself doing that.
- Don’t spend too much on unnecessary stuff. Prefer spending money on experiences. You will be happier, have better memories and surplus money to put to work.
- If you earn well and save money well in initial years, you can force the money to work hard for you instead of you working hard for it.
- Buying a residential house is a must. So save some money for buying it. But buying real estate as an investment is not a good decesion at all. If you compare long term returns of both this asset classes equities are far far ahead than real estate.
- Having loans is no excuse for not investing. Try to invest alongwith your loans. Try to reduce your loan liability as soon as possible. They r killers of your wealth creation.
18 Use common sense and be willing to be a contrarian. But don’t be a contrarian just for the sake of it or to sound intelligent.
Above mention ideas are some very basic to do’s for taking a small step towards the journey of your wealth creation.
HAPPY WEALTH CREATION.