Investment Cafe
SBI Investment Cafe- As important as it is to earn money, it is equally important to grow it in a smart way. This means that the money you work so hard to earn should work for you in the future. If you have a question in your mind that how to make money and save money in the right way, then Priyanka Sambhav has given the answer in Money9Live’s special segment Investment Café.
How can a person become a successful investor and smart saver? This question comes to the mind of every investor at one time or the other, how to allocate his savings properly in the emergency fund and at the same time, how to increase those savings in the future. Many people invest in different places every month, but the question is whether this is enough for wealth creation or something else should be done.
Today, there are people present with us in the investment café who are earning money, some are saving, some have high expenses and less savings, but everyone’s goal is to make themselves future-ready. We will understand where the journey of wealth creation can get stuck and how to prevent it from getting stuck.
What is required to become a successful investor?
While investing, the first thing you have to understand is that your returns should beat inflation. As age increases, so does inflation, so it is important that you choose investments that give inflation-beating returns. Instead of investing in many places, it is more important to see that the investment is in the right place.
The second most important thing is discipline. If you start investing, say, with Rs 10,000 every month and continue it for 15 years, it is important to step up over time. As your salary increases, the investment amount should also increase. It is not right to panic and stop investing midway or to change the strategy again and again. Consistency is the biggest weapon in long term investment and the third thing is that you should have savings for investment. Let us understand this with an example.
Suppose you drink coffee worth Rs 200 12 times a month. This expenditure comes to approximately Rs 28,800 in a year. If you cut it in half and invest that money, this small savings can create huge wealth in the long term.
The magic of regular investment and step-up
Show host Priyanka Sambhav told that if a person does SIP of Rs 5,000 for 20 years and assumes an average return of 12%, then a fund of about Rs 45-50 lakh can be created. But if the same person does 10% SIP step-up every year, then the same amount can increase to Rs 1.21.3 crore. This is the power of compounding and discipline. Before starting investment, an emergency fund equal to 6 months’ expenses should be prepared. If your regular income stops, this fund protects you from financial shocks. Emergency fund is that cushion which does not cause injury in case of a fall.
How to choose the right SIP or fund?
Apart from this, Priyanka has also answered the question of youth about choosing the right fund and SIP. He said that while choosing a fund, it is important to understand where it invests and what is your time horizon. If the time horizon is longer then equity funds may be better, for medium term hybrid funds and for short term debt or liquid funds may be better. Set goals and choose investments accordingly. The most important thing is to maintain consistency and discipline in investing. The path to wealth creation is not through any magical formula, but through proper planning, saving, discipline and increasing investment over time. By taking small decisions today you can strengthen your future.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.