In the financial world, the compound interest works for those people who start saving early as their 20s. Creating wealth is a complex process, but the appropriate methods can assist. By understanding financial jargons and instruments, a financial plan can include debt, equity savings, real estate, and gold.
The five tips can come in handy in long-term wealth creation are as below:
Early bird catches the worm
Investing early can help you get rich through compound interest. It can turn tiny funds into a fortune over time. Early savings will have more opportunity to grow by periodically investing money, keep expenses low, and establish additional income sources.
Invest time and knowledge
Diversifying a portfolio early in life requires time and knowledge of financial instruments. Financial security comes from saving, planning, and spending. Understanding basic financial concepts, especially for millennials entering the corporate sphere can contribute to long-term capital growth.
Fix goals
Set precise savings goals to avoid complexity in long term plan. Define and reassess reasonable goals. You can use SIP to build long-term wealth. A goal-based SIP helps you invest in an asset class (debt and equity).
EPF or NPS
On top of the EPF received from the employer on monthly basis, you can also opt for National Pension System (NPS) to generate better returns as compared to fixed deposits, RD, etc., but can be liquidated only at 60 years of age.
Stocks or Mutual Funds.
Mutual funds are the only long-term asset class that can yield double-digit returns. The equities method may be risky in the short term, but it’s the best strategy to obtain inflation-adjusted gains over time.
Disclaimer: The views expressed in this article are personal in nature and in is no way trying to predict the markets or to time them. The views expressed are for information purposes only and do not construe to be any investment, legal or taxation advice. Please consult your Mutual Fund Distributor before investing. The views expressed are based on the current market scenario and the same is subject to change. There are no guaranteed or assured returns under any of the above-mentioned schemes / fund/ asset class.
Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.