There are going to be many things you figure out you have to do when you start working. The changes are tremendous to be honest because you would have the money all of a sudden and would not have the know how about saving money or even to manage your wealth. This is not just for people who have started working in fact, but even after many years of working.
There are basic rules you have to know about wealth management and ensuring you are making good growth of your money and even know that your money is working for you.
Here are the 7 rules you should stick by to grow your money-
1. Understand your goals: A spot of not being able to meet the goals you have planned is a lot worse than not having a plan to manage your wealth. In simple words, do not over plan or over commit and put yourself in a spot that you cannot reach out to later. Instead, make sure you have thought about the investment amounts clearly and hence make sure that you would be able to grow your money the right way. The first few questions you need to ask is
– What am I saving for?
– What are my goals out of this investment?
– Would I be able to commit to the term of investment?
It could be the marriage of a child, higher education of a child or even your retirement. Understand where you have to put your money. Moreover, you need to know what you can achieve from your savings. Most of us are unaware of what we have to gain from each form of investment which takes us to the next rule of investing.
2. Knowing what you have to expect from your investment. This is probably one of the reasons that most of us look lost at the time of our returns, we do not know what we have gained in the first place. Keep a distinct number as what you would be able to achieve when you put your money in a safe spot. It would not only be the best way to be sure of your returns but also know just how much you can grow your money.
3. Would your investment reach your goals based on past trade? Estimating the kind of returns you would get is equally important too. If you have planned an investment based on a certain life event or goal in the future, analyze if this amount would suffice and if it did, would it be perfect to conduct your activity? If your investment period is for say about 10 years, look at the past ten years and see if the compounded growth was as good as this. If it does add up, it makes perfect sense to put in your money with the same thought process and expect the same gains.
4. Diversify your investment – This would be the most important rule that investors follow. To never put all your eggs in one basket. The moment you are putting your investment together in one place, you are risking it as a whole, critics may say that you have an equal chance of it succeeding too, but the chances you are putting yourself in is far lesser than you think. It would be wise to split your investment to different companies so that the growth is always seen.
5. Buy at the dips: As an investor, you are bound to see times when the market is going to dip considerably. This is the only obvious that exists. It is something that is bound to happen and you would be able to make the most of your investment by purchasing on dips so that your average cost is well reduced. This is common practise for most large investors because they are able to bring down the cost of your investment. So, the moment the market revives and increases, you are able to exit or even book your profits.
6. The right financial advisor: Why hire the wrong wealth management advisor to overlook your money? You might as well look after your own money and then look at shifting the funds in the right funds. So, it makes perfect sense to look after your own funds at all times. This is the best way to guide your profits and to be sure of the growth you can have.
7. Know which stocks to buy or sell: It is so important to have a firm idea on the kind of stocks you can buy or sell or how they are going to perform over the next few months or years. It would give you a better sense of investment and hence would only help you understand where to invest. If you ever had to choose the kind of company you have to invest in, always look into growth over the next few quarters.
Sneha Thakur is an article author who shares the information on finance and banking such investment planning, wealth management services, stock investment etc. through articles, news press release and blogs. Other than writing she loves to travel and listening to her favourite music.