Five money management tips to avoid common pitfalls

We live in a rapidly changing world that has made it necessary for everyone to be financially capable to learn ways to save in order to generate additional income. However, planning and executing a financial plan must stay in tune with the economic realities of the times.

Here are some financial practices that can ensure your financial well-being.

1. Invest early

The basis of a good financial plan is savings. However, to take advantage of this, one must invest diligently as early as possible in life. It can start with simple low-risk instruments, but if a good investor who gets comfortable should always move quickly to high-return instruments. Starting at a young age also ensures that one is confident of enjoying better opportunities as one begins to make bonuses and increments in one’s professional life. Those who start late tend to make costly mistakes than early ones.

Stocks are probably the best investment class out there for retail investors. They perform well and tend to move with larger economic trends like inflation and more, to provide additional late-cycle income. While real estate investments are a necessity for most people, parallel equity investments have also become the norm, taking over from bank deposits and gold.

2. Diversify your portfolio

Make sure there is always a good mix of long-term and short-term investments. While long-term instruments like passive indexed funds can offer good returns and are safer, short-term investments in other forms of mutual funds can help improve portfolio liquidity.

Individual trading can also be much more rewarding and accessible as it does not involve the fees of mutual funds. However, it also tends to take a lot of time and effort. However, online trading has made it much simpler and real-time. Trading platforms like
Binomial allow investors to monitor their portfolio hassle-free with advanced alerts and tools.

FTT on Binomo gives short-term results involving a time frame of 60 seconds to 60 minutes to make a forecast. It is one of the few platforms that allows users to practice before venturing into real-time trading with a demo account. Investors can access their accounts 24×7. Funds always stay safe during any transaction as it uses SSL protocol to ensure that all data is encrypted.

3. Create a safety net

A good financial plan should not bet against the odds, but should be strong enough to survive it. This form of safety net can be provided by insurance. You also have to guard against many things that could go wrong with term insurance, health insurance, critical illness insurance, and personal accident insurance. Although payments can strain annual budgets, they can come in handy when things go wrong.

4. Plan your taxes

A good investment pays off after taxes. Since tax tends to be an afterthought for most investors, their income may be reduced after an IT filing or application. To avoid unpleasant surprises, consider tax in each investment and manage diversity accordingly.

The tax department also tends to be lenient on long-term equity investments, so include a good mix of these instruments in your portfolio to ensure your results beat the markets and the tax. Be sure to include instruments that provide a tax deduction under Section 80C and Section 80D – such as life insurance premium, ULIPs, PPF, EPF, health insurance and more again.

5. Have a good retirement plan

For generations, buying or building a home has been the best retirement plan, especially for those with pension payments. However, very few who started working in the 90s and after have the luxury. Most private sector jobs don’t offer a pension, and even those that do may not amount to much due to inflation and can only work as a supplemental income.

Equity-based supplemental income can provide a cushion against the weather for those who are due to retire or intend to retire early. Most investment advice therefore comes down to stocks and while investing one should beware of fraud in the process.

Binomial is a Class “A” member of the Financial commission which makes it reliable and also guarantees the transparency of services. It also has an indemnity fund which offers protection of up to €20,000 per case, if a member refuses to follow a judgment of the Financial Commission, in the event of a problem. The platform is present in 133 countries and also offers training and financial knowledge for beginners.

Disclaimer: This content is created by Times Group’s Mediawire on behalf of Dolphin Corp. Transactions with over-the-counter (OTC) financial instruments are associated with significant risks. Before trading on the platform, one should analyze their financial capabilities.

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