INVESTMENT PLANNING: WHAT IS IT & HOW TO DO IT BETTER?

 

investment planning

What might your ideal investment strategy be? Is it something that enables you to receive the anticipated returns? Or does it help you achieve your financial objectives? To be fair, it can signify various things to various people.

Furthermore, there isn't a single investment strategy that can satisfy every person's financial objective and be regarded as the greatest investment strategy in India.

Do you have any questions on where to begin a personalized investment planning journey? Let's start by defining what investment planning looks like.

Investment Planning: What is it?

Aligning your investments with your goals and risk tolerance is the process of investing. Analyzing your risk tolerance will help you realize your genuine investing potential.

Here's how to reach your full investing potential:

SWOT analysis is used to identify strengths, weaknesses, opportunities, and threats.

Ø  Your strengths in investment planning include your level of income, your work description, and how long ago you began investing.

Ø  Your liabilities and the number of dependents in your household may be your vulnerabilities.

Ø  You can find ways to cut your spending to the absolute minimum.

Ø  Last but not least, risks to your money are unforeseen events like inflation, job loss, theft, and medical issues.

Ø  The indicator of your risk tolerance is this SWOT analysis of your investment potential.

financial goal

List Your SMART Goals

Investment planning is all about you and your goals. You invest your money to fulfill your goals, dreams, and aspirations for the future. While at it, you should also ensure that your goals are SMART (Specific, Measurable, Achievable, Relevant, and Time-bound). Otherwise, your plans may be vague or wishes that will be difficult to achieve.

Another way to reach your goals quickly is to classify your goals as short-term, medium-term, and long-term.

ü  Short-term goals have a time horizon of up to three years. Examples of short-term goals are home renovation, buying a two-wheeler, and jewelry

ü  Medium-term goals have a horizon of three to five years. Medium-term goals may be goals like going on an international vacation with family or buying a new car

ü  Long-term goals are those for which you have five years or more. They may be your child’s higher education, retirement corpus, or buying a second home

Insure against potential medical risks

You may safeguard your finances from the potential damage that some liabilities may cause by investing in proper insurance coverage.

Here are a few popular insurance products to consider:

·         Term life insurance: Term life insurance covers your dependent family members in the event of an unfortunate incident, such as death, caused by lifestyle diseases and complications.

·         Health insurance: Health insurance covers your hospital bills and daycare procedures and offers cashless hospitalizations at network hospitals. It provides financial protection for you and your family in the face of rising medical costs and uncertainties. Looking to get the right health insurance plan based on how much you earn?

·         Critical illness cover: Critical illness cover complements your health insurance, providing a lump sum for diagnosed acute illnesses like cancer or stroke. It adds to your financial protection, covering expenses not included in basic health insurance, such as income loss.

Conclusion

The optimal investment strategy in India differs from person to person based on risk tolerance and financial objectives. Identifying your SMART goals and analyzing your strengths, weaknesses, opportunities, and threats are all part of investment planning. It's crucial to insure against potential medical risks and match your investment strategy to your risk tolerance. Making intelligent financial decisions requires a solid understanding of market dynamics. Your investment strategy will stay on course if you regularly evaluate how your investments are doing and make the necessary corrections.

Location: Mumbai, Maharashtra, India

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