First thing to do in your investment journey
Most people want to see their money grow, but most of them do not know how to start. So they look into equity funds, bonds, fixed deposits, properties (most people do this now) and stocks (and most people are fearful of this). But while they are busy doing this or listening to others, there are 2 other things which they should look into before they start looking at all those investment types.
Debts
Some debts can deal a killing blow to your investment plan especially those related to credit cards or those which have very high interest charges. It’s advisable to clear those off FIRST before you put your money elsewhere. For example, if your debt’s interest rate is like 4-5%, but your FD return is only 2%, it means you’re actually losing money than earning money. If you can pump money into both sides, then fine. Just be sure never to neglect the former for the latter. Focus on how to stop losing money, then only to how to earn more money.
Insurance
This is equally important. Life insurance and medical insurance are very very important. I can’t stress this enough. There are people who only focus on how to grow their money that they neglect these 2. And when they’re hit with some issues which don’t allow them to work, their dependents will suffer since there’s no income. Or, when they’re hit with some serious illnesses but do not have the money to pay for their medical bills. In the end, they need to take out all their personal savings in order to pay for the medical bills. Yes, growing your money is important, but thinking about your dependents and the ability to keep you healthy are even more important (especially if your company does not give you a medical card). Look into what kind of life insurance you should buy here – How much insurance do you need?
Once you’ve given thoughts (and actions) to these 2, you can start planning the second step of your investment journey. Always remember that your investment journey will be greatly jeopardized if you are not able to generate income, or something else is draining your income away. So do take note. These 2 should be the FIRST thing you should look into while planning for your investment journey.
Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically to your feed reader.
Comments
No comments yet.
Leave a comment