Your future is created by what you do today In 2014, I was keen to plan for my retirement. I was not sure how to go about. As you are aware, our current jobs do not provide any pension and thanks to the medical advances , people ending up living much longer than our predecessors. Therefore a significant portion of our life, we would be living and not earning.
One of the common questions that investors ask me - where should I invest my money ? Fixed Deposit is giving a paltry return of 5 % . Is there any other investment avenue where I could get better return than this ? If you are facing a similar dilemma in this time and age, you are not alone. The answer is simple and it requires a process to be followed.
From childhood, we have been raised in a certain way, which shapes our opinion and attitude towards money. Some are conservative with money , some are willing to take risks . It is important to know where you stand and therefore invest your money in instruments which reflect your risk profile. What is Risk Profile ? Risk profile determines our attitude towards money and it is best you allow a financial planner , whom you trust, help you determine your risk profile towards money as it is important to have a unbiased perspective (as far as possible).
Goal setting, some of you are already familiar with this term, is an important exercise during the beginning of the appraisal year. Goal planning , from a financial planning perspective, is as important. Unlike your appraisal this spans across multiple years . Successful athletes, businessmen and achievers - all of them set goals in life. This gives life a purpose, a meaning. It provides you long term vision. You now know where your efforts need to be focussed.
There are two important factors in determining corpus for any goal. These are time horizon of investment and asset allocation . Time Horizon Time Horizon is the amount of time from today to your goal start date. Greater the time, lesser would be the investment required, all other things remaining constant. Therefore it is always recommended to start early for your goals when time is by your side.