Investment requires discipline

 "If you don't see yourself as a winner, then you cannot perform as a winner"

"Having a dream is what keeps you alive. Overcoming the challenges make life worth living"

A mountain...it represents both a high point and a low point. And even climbing a mountain, there will be moments where you are going up, and then need to change direction and go down in order to continue to the peak. Don't get stuck in the place. Change your mindset. Keep moving. Take decisive action eventually to reach the peak.

Same is with equities, stock markets have cycles both up and down and neither the brokers nor the investors can predict them. The stock market and Government lawmakers will continue to be unpredictable. Don't panic in adverse market conditions. Understand volatility for better returns; this trade-off is a good one for long term investors. Ride out the volatility. Volatility seems to have become the norm for the markets now. Great investment opportunities arise when excellent companies are surrounded by unusual circumstances that cause their stock to be undervalued.

Understand equity markets; follow the growth of the economy. If the economy is doing well or has the potential to do well with many favorable factors, then the equity market will go up in the long run despite volatility. Investment requires you to take the emotion and guess work out of your actions. It requires discipline. 

Speak to your Financial Distributor today. 

Invest wisely.

www.nextportfolioindia.com

                        

SIP OR LUMPSUM - WHAT SHOULD YOU CHOOSE

 

Investors are often faced with the dilemma of selecting between SIP and lump sum investments. Most importantly, they want to choose an option which gives higher returns. First, one needs to understand how SIPs (Systematic Investment Plan) works.

It is essentially a mechanism wherein you invest in equity or mutual funds either monthly or quarterly. Numerous fund houses provide the option of daily SIPs too. You have to select the amount you wish to invest at regular intervals. Keep in mind that this amount remains the same irrespective of market fluctuations. Let's say, you decide to invest Rs.4500 in an SIP on a monthly basis; this implies that each month on a specified date you will invest Rs.4500. Over the years, the SIP will add up and give substantial results.

Lump sum as the word implies indicates that a huge chunk of money is invested into the market at one go. This kind of investment behaviour can fetch great returns at times but it can also be destructive when the markets are volatile. In such situations when it is tough to time the market, SIPs are a safe alternative. As a small amount of money is invested over an extended period, the risk is spread evenly as opposed to lump sum funds wherein the whole amount is at risk.

In addition, SIPs help to cultivate a regular habit of saving. You will not be able to spend on things you don't need since the specified amount will be automatically invested.

To conclude, it is vital to have a detailed understanding about your cash flow and monetary aims before deciding to go for SIP or lump sum investment. If you earn regular income every month, it is favourable to choose an SIP. Nonetheless, if your earnings are irregular and once in a while you earn more money, capitalizing those funds in a lump sum investment might be a good idea.

Make sure that you place aside a part of your income each time you get sizeable amount of funds. Considering the immense advantages of SIP, you can also invest a small amount in SIP out of your income so that you can pay for it monthly even if it's Rs.500. If you can balance between SIP and lump sum investing effectively, you can build a healthy portfolio and achieve your monetary goals without any difficulty.

Next Portfolio 

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Patience and Discipline

 

Whenever we have a hearty meal, it seems so enjoyable but afterwards the feeling is 'full' and sometimes very unpleasant. One feels very lazy and lethargic. On the other hand if one does an intense workout that leaves you sweating like a pig, the 'feeling' that follows is almost always so pleasant. One feels energetic and lively.

Similarly when one invests with discipline and patience, it may not seem pleasant in the beginning but as you invest with discipline and patience over a period of time you start to feel energetic and confident as you experience the formation of wealth. But if you were to spend your money on goodies and things of pleasure, the immediate feeling may be nice but later on, one feels the misty and pain of poverty.

Clearly making wealth demands discipline and patience. It does not come easy.

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7 Steps to Secure Financial Future

 

Every responsible person thinks about a secured financial future for his or her family. However, acting to secure the financial future one has to plan in advance. Here are some steps that could help you towards financial freedom in the future.

1. Manage expenses: Financial Distributors say expenses are the backbone of an individual's financial planning. To spend judiciously, learn the difference between needs and wants. Once you know the difference, it becomes easy to control unnecessary expenses. Remember, as you manage your expenses, your savings would increase which could be invested smartly for wealth creation in the long run.

 

2. Identify financial goals: Zero in on financial goals and set deadlines for each of the goals. The next steps are to measure those goals and regularly check your progress. Be flexible for course correction in case of any divergence from the planned course. 

3. Buy risk covers: Have adequate insurance to protect those who are dependent on you financially. Buy a life insurance plan. Also have health cover for the whole family and insure your house. 

4. Take calculated risks, not blind ones: You should not be afraid to take risks but should not invest based on tips. Aversion to risks could also be due to lack of understanding of investment products. So try to understand the basics of investing and finance. 

5. Don't fear numbers: Often women are found to be fearful of numbers, which eventually leads them to depend on others for their financial decisions. Women should not fear numbers but should be in-charge of the situation and take decisions about what they really want financially. Number crunching could be delegated to someone else. 

6. Ensure inflation-plus returns: Always ensure that your investments give you returns which can beat the inflation rate. Else you would end up with a negative real rate and in the long run you will not create wealth. 

7. Get a good Financial Distributor: Choose a Financial Distributor after proper due diligence because if you get a good person to handhold you with your financial plan, the advisor, like a friend, will remain with you for life.

www.nextportfolioindia.com

Why do people commit FINANCIAL suicide ?

 

Why do people commit FINANCIAL suicide ?

Would you ever drive a car if you do not know driving?

Obviously not because you could kill yourself.However, if you were told that the outcome of the accident would be felt after 40 years.

What would you do then?

Perhaps most of us would take to driving despite lack of knowledge.After all 40 years is a long time. Who cares what happens then.

Human nature is such that we are only concerned about our immediate future.

Unfortunately, this is the principle commonly applied by people in 'personal investing'.

Therefore it is not surprising that we continue investing in Fixed Deposits. After all the consequences of such financial misadventures has no immediate impact.

Most people investing in Fixed Deposits are earning either 'business' income or a 'salary' income that takes care of their immediate needs.

Who really cares what happens in the distant future?

People conveniently reason it out that they will cross the bridge when the time comes. But this 'thinking' is extremely dangerous to say the least.

When people do not make the right decisions about investing during the good days of their lives when they are young and energetic, they will find no bridge to cross during their 'not so good' days when old age strikes them.

As far as investing is concerned, 'delays' certainly prove to be costly.

Also, we need to realise what appears to be a distant future isn't so distant after all for 'time' flies and how.

Therefore, it is actually dangerous to make 'personal finance' decisions without consulting an expert in Personal Finance.

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Instant Gratification

 

Instant gratification

Nobody may admit but we all suffer from a disease called 'instant gratification'.

We hate it when we do not get instant delivery of our TV, our car or our food order. No wonder instant coffee is such a hit among coffee drinkers and instant food is big business.

When it comes to personal finance, instant profits is what the heart yearns for. Hence the one year return sells the most even though it is a faulty strategy.

Patience is the winning strategy but detested by most. We want to instantly be rich, instantly be good looking, instantly grow tall and so on.

It takes determination to find success. It takes years of practice to become a master. It takes years of exercise to get your body into shape. It takes years of studies to sharpen the mind.

Similarly it will take years of SIP to grow your wealth.

The problem is doing repetitive things for years together is boring requiring loads of determination.

Every morning someone find it difficult to muster the determination to go for a swim even though it is a daily routine.

After much coaxing his inner self he enter the pool. The first few laps are a bit difficult requiring some determination but soon it gets easier and the body moves into auto pilot mode. The next few laps are effortless and towards the end of his swim the body feels so good that one wants to do a little more.

The same holds good for SIP investing too. It may feel boring and meaningless because there isn't any instant gratification. The wait seems long. The first few instalments too seem painfully boring. Many times the thought to discontinue comes to mind.

But those who are able to cross this phase will soon start experiencing auto pilot feeling. Now you are cruising. Over a period of time when the wealth starts to show up you just want to go on and on.

The disease is 'instant gratification' and the remedy is will power and behaviour change that needs to be sustained. The result is beautiful for those who have the power to go on and on without flinching.

An financial coach can guide you, show the way, encourage you but it is you who has to make it happen with grit and determination.

It is interesting to note that more than intelligence, discipline and determination makes you win the wealth creation race. 

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Make SIP your long-term companion!

 

Make SIP your long-term companion!

The early bird does get the worm. The next one however, has to search for food.

When you look into our busy lives, many of us live with the misconception that 'Since I don't earn enough, I don't really have much to invest! Plus, who's in a hurry?' This 'so called' belief leads to one thing that we don't pay attention to. Taking action early on that is. Yes! We all have dreams that we hope to fulfil but the fact remains that whether it is about providing the best education for your child or leading a good retired life, we simply don't do enough to realise these dreams.

But seriously? Who has the time? Wouldn't it be easier if someone guided you to make informed decisions? Here's where Systematic Investment Planning (SIP) comes into the picture.

How would my SIP work?

It's an effective way to accumulate wealth in an organised manner through regular investments in mutual funds. Even if you aren't raking in the moolah, it doesn't really matter, because you can start your investment journey with something as low as Rs.500. That's the price of two movie tickets on a weekend!

Don't fret during a downturn or a market slump. An SIP works there too. It simply allows you to buy mutual fund units at a lower price and potentially earn higher returns when the market sees an upswing.

Stay on the Road.

Most of us begin our investing journey with a lot of enthusiasm but get lost along the way. We fail to adhere to the monthly saving system and let our investments slowly dwindle which in turn, reduces the health of your corpus.  Investing through an SIP, allows you to maintain your monthly investment pattern, which is easier than trying to collect a lump sum and investing it at the end of a certain period.  Also, you can link it to how much money you have and increase your monthly investments as per your goals.

Want to make it work? Connect an SIP with your personal goal

An old adage says, "You can't plough a field simply by turning it over in your mind." This stands true for your investments also. From saving for your child's education to keeping your eye on a trip you've planned, you can decide to invest in a short-term, medium or long-term plan. All you need to think about is how much do you need and when? However, be conscious of the mix you have chosen to invest in as it depends on your investment horizon. Equity funds are known to be a good tool for long-term investment, but if you are looking at something short-term then debt funds may suffice.

Starting Early

Imagine if you got a head start in a race called life? Would it not make the run a bit easier? That's exactly what you should do. Start as early as possible small amounts. Consistent efforts and focus on your end goal is the stuff winning stories are made of. The writing is clear on the wall. The sooner you begin investing, the better.

This is how SIPs may help you in your journey to financial freedom. They provide you with the much needed discipline and convenience to create a healthy corpus. Hence they are like your Good EMI.

www.nextportfolioindia.com