Investing for the long term is the key to stay rich in future times. Having money invested in various financial securities makes out future lives secure which are mostly uncertain. You may spend a lot of time taking care of your child’s health, homework, and social skills. Then there is an idea about your and their future. Moreover, you do not want the lack of money to hinder your dreams.
Compared to general inflation education inflation is also rising. This pandemic has taught us well how savings and investments help. Indian homemakers are very much good at running household expenses without any disturbances. Setting goals based on funds in life is as important as working. Here investment for the long-term can be categorized into various types likes long, short, and midterms. Investments do not always need to be in banks like fixed deposits there are other better options like investing in mutual funds, debt funds, equity funds, and financial securities too.
Considering the risk factor in financial management, one should plan his investment according to the time i.e., people can take a greater risk if the investment is long-term as they have much time to recover if any loss occurs. And people whose goal is short-term cannot afford losses as there is no time, so investing in risk-free debt funds and mutual funds is recommended.
To achieve goals at different stages of life, you need to invest in different asset classes. If the number of years is different for different purposes, please consider investing in different assets. The idea is to first define your goals, and then invest in different asset classes based on your perspective. Some of the most popular debt securities are bank deposits, debt funds, and other fixed-income investments, such as postal savings plans. They are mainly used to preserve capital and generate some profits in form of returns. Similarly, some common and popular assets are stocks, financial instruments, bonds, SIP’s, stock funds, stock funds in ULIP’s.
While investing think about emergencies that are uncertain and can arrive at any time. so to control the uncertainties try saving 4-5 months’ expenses as emergency funds. It is better to have different investment plans for each of the goals and each of the kids if there is much age difference. There are many schemes and policies which mostly focus on children’s growth like public provident fund, Sukanya Samriddhi Yojana, equity funds.
Investing in SIPs from younger age plays a major role in financial support in the long-term which requires you to invest small amounts on monthly basis and the amount compounds and accumulate huge gains by the next decade or two.
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