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The whole process of budgeting as well as investing is simpler when there is a stable salary. However, increasingly we continue to live in a world of commission-based jobs and freelancing. Being self-employed has a distinct challenge – dealing with a fluctuating income i.e a fat cheque on few months while a smaller amount on other times.
Under such circumstances, the question that arises is, how does one save as well as invest to achieve their long-term financial goals? This blog will answer this question below. How can investors save and invest for achieving their goals with a fluctuating income? Map out next year's income One should try and decipher income patterns based on past income data. It will help them estimate income for the forthcoming year too. So, if an investor has received fluctuating amounts of money in different months as salary, like for instance maybe Rs 40000 in one month, Rs 80000 in another and Rs 60000 in the other months, they can project a monthly income of Rs 53000. This will be based on a yearly average. A more traditional estimate will consider the lowest monthly payment of Rs 40000. This is essentially the money with which one needs to manage their expenses and savings. Investors can also visit financial planners like Wealthclock Advisors and acquire their expert guidance for the best results. Creation of a baseline budget The next step involves categorizing every expense under two distinct categories – needs and wants. Monthly expenditure on food, groceries, rent, and utilities fall into the first category. Discretionary expenses like purchasing trendy clothes, entertainment and exotic vacations all fall into the 2nd category. One should keep in mind their discretionary expenses and ensure they are not overspending. The money saved can be utilized in investments like mutual funds. Saving targets Subsequently, every financial goal should be converted into saving targets. Like for instance, if someone is planning on building a retirement nest egg over the next 3 decades, they need to work backward. They should look at how much they are required to save (quarterly, half-yearly or annually) by investing in equities as well as debt in the proportion to their preference. Proper saving can lead to better mutual fund investments that will propel the goals of the investors. Paycheque People should create two separate bank accounts – a personal one and another that is for business purposes. They need to give themselves a paycheque by transferring money on a monthly basis from their business account. The amount to be transferred will be equal to budgeted household expenditure as well as that of the savings target. Also, there should be another aim to make investments early during the month, before the household expenditures. And the personal bank account should be used for this purpose. Creation of a cash buffer How can people give themselves a monthly paycheque when they have an irregular income? This is where a three-month cash buffer comes useful. It should be made over and above that of their emergency fund. This will ensure that their savings, as well as budget plan, are not upset due to a few bad paying months.
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Should An Investor Spend or Invest More?7/15/2019 It is a constant tug of war where an investor is torn between their urge to spending money or the need to invest more. If they can't spend on the things they desire, what's even the point of investing? The answer perhaps lies in striking the right balance between the two. And this is what this article will discuss.
A traditional employee waits eagerly for annual bonuses as well as increments in the new financial year to indulge in their spending activities. While many are lured this way, others concentrate on windfall gains such as vesting stock options and mid-year salary hike due to fresh funding, that can come about anytime in a year. There will be a temptation to start spending the gain. However, there will be a soft yet significant voice at the back of an investor's head too that rationalizes and lays emphasis on utilizing windfall gains prudently towards their investments. This constant tug of war can be quite discomforting and therefore, everyone should consult experts like Wealthclock Advisors who will offer the most helpful financial and investment guidance. Plan the spending first This blog will try to answer this dilemma helpfully. One should definitely not spend their whole gain on acquiring material possessions. They should focus on the necessary things like a down payment on a new car or re-painting the house. After that, they should allow themselves some indulgence but obviously in a limited way. The limit can be anything on the gain depending both on the total figure as well as accumulated savings. The focus should not drift away from savings, as it propels one's mutual fund investments or other schemes. The money should be spent quite smartly as a matter of fact and an investor must analyze his current situation while doing so. Planning the whole thing will help them optimize the costs by looking for reasonably priced options rather than going for impulsive purchases. A strong emphasis on investment After clearly defining the spending amount, people will know how much exactly they need to invest. The investment options should be chosen based on the existing portfolio of financial securities as well as future financial goals. This signifies they must ensure that their next investment helps them remain diversified across equity, debt, and other asset classes as well as in their choice of particular products. In the end, it should enhance their ability to achieve the set financial goals. For the most helpful mutual fund investing advice and other related guidance, investors need to get in touch with prominent financial experts. After doing all this, the first step in execution should be towards investing instead of spending. Quite frankly, it is easier to over-spend than to over-invest. So, if one does end up over-spending, then the excess will obviously come from the amount set aside for investments. Such behavior can set people back in terms of achieving their financial goals. So, investment should come prior to spending.
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Investment is an important section of everyone's life. People must take important and wise steps in order to let their investment schemes bear fruits. It is the sheer results that lure people towards going for the different financial investment schemes. Among the many names, the equity funds stand out than the rest.
Equity, over the years, has shown results that are tremendously significant in terms of performance and numbers. So, for long-term funds, it is always advised to go for equity. Most professional financial experts like Wealthclock Advisors will recommend their customers to go for equity instead of others if they have long-term goals in mind. However, equity investing implies taking quite a bit of risk. It also suggests people must have money to put at risk. But the main question that arises here is, should only the rich invest in equity? It's clearly a misconception to think that equity investing can begin after people have accumulated wealth. However, there are other essential criteria that need to be followed. This blog will discuss them below. 2 essential criteria to earn success in equity investment Equity requires time Stock prices can move up or down. It is seen by analyzing the change in some weeks or months. So, most financial advisors recommend their customers to have longer investment periods of 5-7 years. It is the quality of earnings that matter the most. So, this is one of the main reasons that experts recommend giving time to equity investments. Price volatility risk in equity investing smoothes out when people remain invested for a longer period of time. But interested investors need not worry as the earlier they begin, the more time they can stay invested and lower the risk of lesser returns. Mutual funds are thus, so highly preferred by customers. Equity needs selection The equity selection process is an important criterion that determines the fate of the investor. So, if someone chooses a poor-quality equity fund, then they can lose quite a lot of money. But yeah, those who have accumulated a lot of savings in the first place, they may not have that much amount of risk. So, it is extremely important in general, to select the most suitable funds that will let people fulfill their financial dreams. The best thing about this is, with mutual fund investments, one gets a qualified mutual fund manager who will reduce their worries by providing the most helpful guidance and help. The benchmark of a fund is generally a market index that sets the basic expectation of return from an equity portfolio. With the assistance of mutual funds and advisors, one can access good quality equity investing even with minimum accumulated savings and small amounts, to begin with. Therefore, the earlier someone starts and the longer they stay invested, the more likely they are to achieve the goals. So, these are the 2 most important criteria to succeed in equity investment.
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Equity-linked saving schemes or as they are popularly known as ELSS are varied equity mutual funds. A considerable chunk of the amount invested here either goes into equity or related securities. There ELSS fund manager then selects the securities on the basis of the firm's growth as well as a reliable business model.
Under section 80C of the Income Tax Act, an investor can avail tax deduction on their investment up to a sum of Rs 1.5 in ELSS. So, before proceeding with this highly valuable investment scheme, one must ensure that they are thoroughly aware of its different aspects. There is also the option of visiting top financial experts like Wealthclock Advisors who will be helpful in such a situation. 4 things that one should know before investing here ELSS is one of a kind as it has the shortest lock-in period among the other similar ones. One has to stay invested for 3 years. This feature makes it a good investment option for those who have short-term goals. So, an investor can invest in ELSS only after being sure that they will be requiring the money after the fixed lock-in period. There is no guaranteed return in case of ELSS. So, what to do in this case? Well, advisors say that staying invested for a longer term can produce higher returns. They are higher than other similar options. A good financial advisor will thus be helpful in such cases. One can get to know about ways to invest in mutual funds online free from them. Before engaging in investment, it is critical to learn the basics of that form of investment. In the case of ELSS too, one needs to learn how market and equity-related securities work. Doing goal-oriented ELSS investment can lead to the generation of better results. Apart from this, an investor should check out the past performance of the fund before investing their money in. This will bring in better returns. So, if ELSS is used in the right way one need not just rely on the top equity mutual funds to invest. They will have two powerful options with them. With ELSS one can expect a bit of risk too. Since a good portion of the investment goes into the equity and related securities, an investor can face a higher risk. This signifies that the ELSS's net asset value fluctuates a lot. But let's look on the brighter side. One can lessen the risk by investing here for a longer period of time. Apart from the risk factor, it is termed as a good investment instrument if someone is looking for good returns in a quick span of time. So, these are some things that every investor who is enthusiastic about ELSS should be aware of. One must be thoroughly aware of the ins and outs of every financial tool they are using, in order to have a smooth investment journey.
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A mutual fund investment plan is recommended for the investors who do not wish to bear more risk and also, do not have the capacity or time to analyze the market trends on a regular basis. Mutual funds investment through the extremely useful Systematic Investment Plan (SIP) has become very popular in recent years.
SIP is a process that benefits investors in several ways and this facilitates mutual fund investment too. So, if you are an investor who is looking forward to the best way to earn handsomely from your investment, then go for this kind of fund but via SIP. Mutual funds have several benefits like an easy process, lower risk than others, active market tracking is not necessary and others. 5 things that you need to know while going for mutual funds via SIP Set objectives at first If you are following this route for wealth creation purposes, then you must set a definite objective as per the respective requirements. If you are having trouble in doing so, then visiting top experts like Wealthclock Advisors can be pretty helpful. They will also guide you on how to invest in mutual funds online free. Lower average cost While investing in the best performing mutual funds 2019 through SIP, you will have a lower average cost of investment. It is not possible otherwise through lump sum investments. One-time return Vs SIP return It is not necessary that your mutual fund SIP returns will be higher than the lump sum investment. Returns from the same mutual fund scheme vary between investment via SIPs and one-time investments. Refrain from stopping SIP You should not stop your SIP investment especially at difficult times or maybe when its time for a market correction. Because of the dip in market prices of the underlying debt or equity assets, a smart investor may end up purchasing more mutual fund units compared to what he does during the bull run. Investment review If you invest in mutual funds via SIP route you are not required to keep a track of your investment on a daily basis. But, a monthly or maybe a quarterly review of the SIP investments will offer a clearer picture of how things are going and whether there is any need for improvement or change so as to facilitate the overall goals.
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Money saving is something that makes our life comparatively easier. Different facets of life need to be handled in a distinct way. So, to serve the purpose well we need a relevant sum of money. Sometimes life throws tough situations in front of us, in the form of emergency situations, that demand some significant money-spending.
So here, the benefit of money saving comes to the rescue. We must prepare ourselves for the worst and have a monetary support. Most people do not know the importance of money saving and keep on spending recklessly. If you too are thinking about how to save money fast, then this blog will certainly provide you with some excellent ideas on the same. But first, let's discuss the vitality of the topic in question. Why is it necessary to save money? It doesn't matter how much you are earning at present, if you do not engage yourself in saving money for the distant future, then you are surely not taking the steps towards a financially independent life. There are enough examples to showcase how the lack of money-saving has left hundreds of thousands of people to borrow money from different financial institutions or people for meeting the demands of a specific phase of life. Therefore, it goes without saying that you must select the best ways to save money fast. Money saving proves to be a highly beneficial process during the time of a bad economy. It can ease up your financial situation quite a bit. Having an additional sum of saved money in the bank account can be helpful in numerous such cases. For instance, they carve out a healthy post-retirement life. Life after retirement demands a supportive and constant financial support. This comes from different investment schemes and money-saving acts. Other than these, there may be times in your career, when you have to seek a new job all of a sudden. During such times, our savings help us immensely. Some easy ways to save money fast Most of us are not well-acquainted with the easy ways of saving money. Are you wondering how to save money fast? Then follow these simple steps below. Develop a budget A budget needs to be developed at first, as it is the first step taken towards saving money. The goal behind a budget is to cut-down unnecessary expenditures and thereby, control the wastage of money. When spending limit is reduced, you save a significant amount of money and thus secure your future to a certain extent. Budget development is among the best ways to save money fast. Form an emergency fund An emergency fund is required during the most difficult times of life. An emergency fund serves the purpose of meeting the expenditures incurred during an emergency period. An emergency can come in different forms. For instance, a medical emergency, a job emergency etc. It's a different form of saving which ensures you need not panic during such troubling times.
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Retirement is a phase of life that needs to be handled in a better way, in order to ensure you live it comfortably. Finances are something that worries every retired person. So, to ease up the pressure quite a bit, you must begin planning from now onwards. Proper financial planning for a post-retirement life is an extremely vital task, that most people are spending a valuable time on.
The fact is that those who do not fail to properly plan for their post-retirement life from a younger age, are seen to be more comfortable and financially secured then. The entire process is a lengthy and continuous one. It spans right from the time you begin your savings and investment schemes to the time till you retire. It's always better to take every step in a planned way. Nobody can predict what the situation will be during their retirement. So, trying beforehand is always the most sensible option. There are different safe investments with high returns in India that too can serve the purpose well. Now, let's have a look at ways that will help you make your post-retirement life a happy and satisfied one. A few simple steps that will lead towards a better post-retirement life Now, let's go through different steps of securing your after-retirement life. There are a number of them. Assessment of the financial situation This is a vital step in the whole process. What you need to here is, chart out an inventory of sort of every present current assets and liabilities along with incomes and expenditures. A proper financial planner comes into the picture here. You can make estimates about your expenditures and responsibilities in the certain future. Also, the financial planner will be able to suggest you different investment methods such as mutual funds investment plans, banks, SIPs, and others. Valuation of assets and liabilities You also need to evaluate your assets as well as liabilities. For current assets you can contact your agent and determine the cost of life policy, the current value of your saving bonds, the value of your house and every other real estate etc. For current liabilities, you can start with the fixed bills you owe every month such as that of electricity, tax, telephone, water etc. Then evaluate the loan value you owe. All these will greatly contribute towards a better after-retirement life. There are different safe investments with high returns in India that can become strong assets for you in the future. What more can you do? Budgeting is vital for leading a healthy retirement life. Budgeting helps you determine the amount of savings you need to do and for a time period, that will lead you to enjoy a seamless post-retirement period. While forming a budget, do take into consideration the amount needed for any mutual funds investment plans that you will do now. You can also involve yourself in emergency funds. If there is ever an unexpected financial problem, then an emergency fund will help tremendously. |