Partner With Us NRI

5 Investment Tips for First-Time Jobbers for This Fiscal Year

Today is the information age, and everyone is working to achieve financial independence. Where to begin, though, remains a concern. The days of saving money just to save it are long gone.

You must have heard the phrase, “Make your money work hard for you,” from the famous book Rich dad, Poor dad. Simply put, the money you make working hard at your job is better invested than sitting idle in your bank account.

If you are a first-time employee, then inculcating an investment habit right from now can take a long way in terms of wealth generation. Here are five tips to get you started.

A Penny Saved Is A Penny Earned

It is not about how much you make but how much you save. It’s the discipline that counts and creates wealth over time. When your salary hits the bank account, you must set a budget for your expenses and put the rest into investments. You must never forget that a penny saved is a penny earned.

There are various options to invest your money, with good returns on investment. Safe investors can consider debt mutual funds and gold. Since you have just started working, it may be a good idea to invest some of your money in the stock market or, at least, in equity mutual funds.

Diversification And Taking Calculated Risks

The basic principle to understand is that risk and reward go hand in hand. A higher reward could mean a higher amount of risk involved. There are no investment opportunities that are ‘zero risk’. However, with research and guidance, you should be able to avert some risks. If you want to be comfortable with the value fluctuations of specific asset classes, you must be aware of your risk tolerance and diversify your portfolio accordingly.

If you had a crystal ball that could tell the future, you could ask for one stock and just put your entire life savings into it and come out a winner. Unfortunately, no one can predict the future, so you don’t know which assets will go higher and when.

The best way to avert huge risk is to diversify your portfolio in terms of the risk/reward an asset class provides. It is advisable to ask for help from an experienced individual who can help you analyse your risk tolerance and suggest you a mix of investments where you feel comfortable even if the market fluctuates.

There are several asset classes that offer relatively low to very high returns on investment and have a ratio of risk associated with them accordingly. The general way to invest is to optimise and balance your investments in  equity and  gold bonds, large-cap mutual funds, and fixed deposits. This assures a good return over a more significant period and reduces the risk due to high volatility in the short term.

There Is No Perfect Time To Invest In Equities

Investing in the stock market is the new hype that is going around, and the most asked question around this topic is when to invest. Let’s be honest, there is no right time, at least not for general investors. Because no one knows when the market will go up or go down. When we talk about equities, the view is long-term, maybe retirement or planning for your future needs.

We know that equity is a growing asset class that has grown decade over decade. In the short term, there is no guarantee on how the markets will behave. If you plan on investing in equity, you need to consider more extended time frames. Instead of putting in all your money at once, it is advisable to put it in parts at regular intervals, saving you from a near short-term market crash. You can average your equity by buying at every price point regularly.

When you plant a tree, you can’t just sow the seed and forget about it till you can pluck the ripened fruits from it. It is essential to take care of the plant at every stage to help it grow into a big healthy tree with lots of fruits and shade. Similarly, investment is not something where you put your money and forget about it. You must monitor and review your portfolio at regular intervals.

Depending upon the risk involved, you can review your portfolio every alternate month to every alternate year. It is advisable to review at least every six months. Since your portfolio depends majorly on your short and long-term goals, they may change over time, and it is better to adjust your portfolio according to your needs. For example, if you are getting married in a year and want to take out money from your investments, you can put your money in moderate or low-risk assets for that period and not risk depreciation on your savings.

It’s Never Too Early To Start Planning For Retirement

I know you are young, energetic, and carefree right now. You work hard to earn your bread and lifestyle. But that won’t be the case when you get older. You will need a cushion of savings to help you through the later phase of life. Your retirement can appear better the earlier you start. Compounding works like magic, and a couple of years early, it can significantly impact the end figures of your investments. So, it is never too soon to think about your retirement.

You Don’t Need To Be Rich To Hire A Financial Planner

This information looks like a lot to grasp at once. But you need to take the first step, and things get easier thereon. However, there is still an option to hire experts to manage your money, and contrary to general belief, you don’t have to be rich to hire someone to look after your money. An expert financial planner can help you set your financial goals and identify the perfect mix of asset classes for you, and it becomes easier to just not think about anything and follow the set plan.

Final Word

Finally, investments, in a nutshell, are to acquire assets that put money in your pocket. Your chances of obtaining financial independence increase the earlier you begin and improve. Remember, this is your hard-earned money and who better knows where to put it than you?

Disclaimer: ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. AMFI Regn. No.: ARN-0845. PFRDA registration numbers:  POP no -05092018. I-Sec acts as a Composite Corporate agent having registration number –CA0113. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund, Corporate Fixed Deposits, Bonds, Alternate investment funds, Tax planning, Succession planning, NPS, IPO, Investment Advisory and Loans related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. Please note, Insurance related services are not Exchange traded products and I-Sec is acting as a corporate agent to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.