Money makes the world go round… or at least it seems to. Many will argue that just earning money isn’t enough, one has to grow it. For women especially, money management has never been more important than it is today. We’re becoming more driven and independent, and our finances have a giant part to play. Whether your salary has a couple zeros or many of them, learning how to manage and grow your wealth is important, but unfortunately, many of us don’t know where to begin (now, wouldn’t teaching us about bank rates been more beneficial than home science?). To learn more about this and finally start our journey towards becoming our own sugar-daddy, we invited Yogita Dand, Founder of Svarasa & Certified Financial Planner to host an Ask Me Anything session on the Girl Tribe by MissMalini App and answer questions you had about smart financial planning. Here the are, answered:
1. When do you know it is the right time to invest?
Every hour, every minute every single day is the right time to invest. You can never time your investments, but yes the more you stick with your investments, the more loyal they are to you!
2. What is the best option for growing my wealth with minimum investment?
If you have never invested in direct equity before, then I strongly recommend you start with mutual funds first and then graduate to direct equity as that would be a very concentrated investment These days we have a lot of options, mutual funds, direct equity, international equities, REITs, INViTs, PMS, P2P lending, but when you are just starting out, understand and then take calculated risks.
3. Are there any short-term courses I can do to learn financial planning?
I am not aware of any short term courses but trust me when I tell you that financial planning is an ongoing process and ever-evolving one. So unless you self-dive into this practically and make mistakes, you are not going to learn much from any course. Even when I completed my CFP course, I had to still learn a lot of things practically and I am still learning every day.
4. How can I start saving with minimal income?
According to me, one should start by saving at least 30% of your income, how much ever minuscule your income is. So start small and keep increasing as your income grows.
5. Is digital gold an avenue worth exploring for investments and financial growth?
Digital gold can be invested in two ways: Gold ETF and Sovereign Gold Bonds. ETFs can be invested in through your DEMAT account and have the same market rate of gold and DEMAT charges which i s still cheaper than physical gold. Also, with digital gold you save on storage, theft and more. Sovereign Gold Bonds are issued by the government and are in DEMAT or physical form. They generate 2.5% interest per year, have a lock-in period of 8 years and you get the exact market value at that point of time when you sell them. Some brokers have also introduced their own digital gold, but I am really not sure as to how safe that is.
6. As someone in their 20s, should I be saving more or actually enjoying my earnings?
I personally believe in doing both! The ratio is 33% investments, 33% for self and 33% for charity of all your surplus, so keep a balance of everything, The world needs a lot of helping hands too!
7. Do I need to start investing as a teenager?
Yes of course! I had started my son’s investments in mutual funds since he was three and when he turned 18, I started investing in direct equity in his own account. So the earlier the better. Warren Buffett has said that he started investing from the age of 11 and he thought that was too late. So, there is never a later “better” age to start growing your wealth!
8. What is the best option to save for my children: Fixed deposits, mutual funds, provident funds or insurance?
Every investment has its own advantage and disadvantage. Recurring deposits and fixed deposits for shorter term can be kept for emergencies. Mutual funds help create wealth over a long period of time. Insurance is not investment, it is a way to safeguard your dependents in case of any untoward incident that might happen to you. Start a PPF account in your child’s name which will cover the debt portion of his investment and simultaneously start a SIP in equity mutual funds for the same period, that will also help create an education corpus for him.
Do you have any question related to smart financial planning? Share it with us in the comments below, or better yet, join the conversation on the Girl Tribe By MissMalini App!