The higher you climb the career ladder, the more money you start adding to your bank balance. This comes with an added responsibility of being able to manage it efficiently, especially when it comes to paying that huge chunk of tax out of your hard-earned salary. Seriously, taking smart decisions regarding tax investments can be quite challenging especially when finance is not your cup of tea. Nevertheless, it is something we millennials need to know (to be called ‘self-sufficient’ adults). Here are some simple starters that will help all of us understand this seemingly complex issue.
1. Set clear objectives that include both long-term and short-term financial goals.
You can sort your finances depending on what and how you have planned in your life. In case you are planning to buy a property or save up for your retirement, you must plan for long-term financial investments. Similarly, if it is something like a college education fund or a world trip, you must opt for short-term investment instruments. Again, something to note here is that depending on the kind of goals you are setting, you need to consider the amount and tenure of investment as well.
2. Invest a fixed amount every month so that by the time you are 50, the increased rate of returns will yield you more money.
It is always better to start with at least a small amount of investment early in life, which you can consistently save every month out of your salary without fail. Sacrificing a few restaurant outings or movies for this will help you in the long run. Starting off with investments early in life is always better than doing it post your 40s. By the time you are 50 or 60, you will end up with more money due to the compounding rates of return.
3. Speak to an investment advisor who has more knowledge about the market.
Sometimes in certain kind of stocks, you might need an expert’s opinion. Especially when it comes to complex portfolios, you should be a bit careful before taking decisions on your own. Consult them to get a better picture of the stock market, and invest accordingly.
4. Diversify your investment portfolio.
Especially for us millennials who generally have fewer assets, it is better to put our eggs in different baskets so that the risk factor is less and the returns are high. Investing slowly and wisely is the key, and diversifying will be a smart thing to do.
5. Figure out your knowledge about investments.
To start off, you need to know everything about what you are investing in. An easy way to do this is by just downloading a reliable personal assistant like the Haptik app on your phone. Recently, Haptik in collaboration with HDFC Life has come up with a Health & Finance channel, and has built India’s First Insurance Chat Bot wherein there’s a quick quiz that will help you figure out your financial planning. It will even give you an indicator score towards the end. Basically, it will help you simplify, as well as understand your investments better. To start using Haptik, download it from here.
Going through these tips and putting them to practice will give you a sense of confidence to handle your own finances. So, before 31st March make a wise choice and invest in at least one tax-saving option. After all, working hard isn’t enough, saving smart matters too, right?
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