Skip to main content

Should you start Big when it comes to your investments?



The other day I met a Startup entrepreneur who was just talking about the importance of starting and that also starting big. As per him, a small game or investment had more chances of failure in comparison to playing big. I could understand being an entrepreneur myself that he is only thinking about launching big obviously with the backing of some deep pocketed private equity firm. But hey, I have also seen start ups who started small and made it big eventually slowly and steadily step by step.
Same is the case when it comes to investments. Should we start only when we have a big chunk sitting in our bank account or should we start small in systematic manner slowly accumulating our wealth. Let’s hear out some benefits of investing regularly rather than waiting to strike gold with the larger chunk of money.

1.       Less fear of markets
If you are a regular investor who invest systematically, you don’t need to time the markets as your investments are going to the markets in regular manner without your need to monitor the timing. Sometimes the markets would be low and sometimes they would be high, hence averaging your investments.

2.       Better Diversification
Rather than putting all your funds in one or two schemes you can start your SIP in a phased manner giving you time to check which strategy is working best for you. Despite having SIPs if you are checking your portfolio on daily basis and get hassled if the markets are volatile, it means that you have less risk appetite and should have less exposure towards equity.

3.       Boon for people with irregular income
If your income comes in phases, there are chances that you already have plans for your money before it hits your bank account. If you keep waiting to accumulate that big chunk for your investments, that day might never come as you would always have your expenses lined up. It makes sense to start your investments even with a small amount as it will keep your savings habit up in the course.

4.       Regular investments help you plan better
We all have financial goals and to achieve them we need to have certain amount of money by the goal date. These goals get achieved in a much better manner if we invest for them in a regular manner rather than investing irregularly. Consistent and Regular investments also help us check on where we stand with regards to our goals.

There are many options to build a house – some do it haphazardly and some take their time and build their house brick by brick paying attention to each and every detail. In the end, house built with proper care and planning lasts longer and serves purpose for the coming generations also. Similarly planned systematic investments done with the proper objective in mind takes care of financial goals and legacy planning as well. At least on One thing I agree with the entrepreneur friend of mine is – STARTING IS MORE IMPORTANT.



Charu Hastir, CFPCM is founder of http://www.theriteplan.com/. Rite plan is an online financial planning portal created to achieve a single objective of providing easy and Do It Yourself Financial Planning to netizens. Rite Plan is wholly owned by Tikkun Olam Financial Planning Services LLP. Please visit: https://theriteplan.com/index.php?route=common/home/

Comments

  1. An instrument that's price specify is https://www.excel-accounting-price range-evaluation.com as a results of it is the capability to accounting for all basic accounting capacities. You’ll too rely on since it'll execute all fund investigation at intervals the trade getting month to month report seeing of record, pay rationalization and cash stream articulation. As well supply arrangement in exceed expectations budgeting for organizations for current and future year furthermore.

    ReplyDelete

Post a Comment

Popular posts from this blog

Why your Financial Plan is always Work in Progress?

Ever heard someone saying, this is my last month in the Gym, after that there is no need for me to workout ever again…I will stay fit for the rest of my life without any fitness regime. No one can retain the perfect physique forever without exercise. It is always a constant effort to stay at the desired level for almost anything that you think of. You cannot be a great chef without trying out new recipes, you cannot be a great marketer without adapting to new marketing strategies, you cannot be a great fashion designer without adapting your fashion sense towards the trending styles. Leave all of this, you even cannot even think of becoming a good parent if you don’t change from old tricks to new methods for upbringing this generation kids. If you have to upgrade your act with every other thing in life, then how your investments could be any different.
The Financial Planning Process has 6 broad steps with the last one focussing on the importance of monitoring and revision of the plan …

Union Budget and Your Financial Plan?

Honorable Financial Minister Piyush Goyal presented this year’s Interim Budget on 1st February 2019. Every Year, on the day of the budget announcement, you can see almost every individual glued on to their Television or mobiles to check the budget updates with much excitement. Sometimes the Budget announcements cheer us and sometimes they make us sad as we think that there are not many benefits being offered for individuals in our tax slab.

Budget is also referred as Annual Financial Statement as it contains an extensive account of the Government’s finances i.e. Government’s revenue and expenditure for the fiscal year. How relevant is this budget when it comes to our personal financial savings? Should we wait for the Budget to be announced and then start our investments or should we do our investments without any relevance to the Budget? Let’s discuss this in detail.
Budget helps in Tax Planning

Budget surely helps in planning the taxes for the next financial year. Budget is presente…

What to do when Stock Markets suddenly go up?

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” – Peter Lynch

This May we have seen BSE SENSEX moving from the levels of 39,031 on 30th April to 37,090 on 13th May and then back again to 39,352 on 20th May. Such volatility in such a short period makes us doubt our investment decisions and questions our long-term plan of staying invested in the equities. This Market volatility has the power to change our investment strategies and at times even question it. Sometimes we think that we have missed a golden investment opportunity and on other times we assume that we have invested at a very bad time. At the very best it keeps us confused on our next steps.
John Maynard Keynes has rightly said that "Markets can remain irrational for longer than you can remain solvent." But how should we treat our investments when we come across such turbulent times and what is the right course…