Investing is synonymous with securing your financial future. It helps you receive inflation-beating returns, which are even more important in the current scenario. It’s a good idea to consider a goal-based investment strategy to meet both your short-term and long-term needs. For this, you can explore investment options that are appropriate for your salary bracket. There are plenty of choices, including real estate, insurance plans, mutual funds, emergency buckets and trading shares. 

As a thumb rule, it’s good to invest at least 20% of your salary and increase this as and when possible. It becomes particularly important if your annual salary is more than ₹2,50,000. To make the right decision, you will need to consider your current expenses, how much risk you can take (risk tolerance) and for what timeframe you can keep the funds locked (investment horizon). With proper planning, you can meet various goals like higher education, a luxurious wedding, buying a home or car or a robust corpus for your retirement. Here are a few other reasons you need to begin investing right away. 

Power of Compounding 

This is the process of adding an ‘interest’ on ‘interest’. When you invest money, it earns interest. When you invest it for longer, interest is earned both on the principal amount as well as on the accrued earnings. It means you’ve reinvested your interest to earn bigger gains and the phenomenon is known as compounding. This helps build sufficient wealth over time.

Starting early in life, say in your 20s, you can invest as little as ₹500 each month to reach your goals at a later age. You do not have to stretch your finances. You can invest according to what you can afford, after meeting your essential expenses. 

Helps Get Loans Easily

Investing early can improve your financial status later in life. This can help you tick off the income criteria for loans set by lenders. You can also use your investment as collateral in case you need funds to meet a planned goal, like travelling abroad or higher education. However, for an unsecured loan, you need to have a good credit score. This not only helps you apply for a bigger loan but also allows you to negotiate better interest rates. To improve your credit score, you can apply for a digital card like LazyCard by LazyPay to make regular purchases. By continuing to repay on time, you can build a healthy credit score. 

Reduce Taxable Income 

PPF, NPS and ELSS funds are the top tax-saving instruments in India. They qualify you for a deduction of up to Rs.1.50 lakh per annum under Section 80C of the Income Tax Act. You can invest a fixed amount every month, which helps you develop the habit of saving and ensures the returns continue to accrue. But what if you have an unforeseen expense? Maybe you need to buy something for the home or wish to go on a holiday? With LazyCard by LazyPay, you don’t need to liquidate an investment. You can use this digital card to make payments and repay when your next salary comes in. You can download the app from the App Store or Google Play Store to get started with quick and paperless KYC.

Retirement Corpus

If you start setting aside a portion of your salary from the time you begin earning, it can snowball into a large amount over the years. This is because the money will have ample potential to grow. This helps you spend your golden years in a financially secure and independent way. You don’t have to compromise on your lifestyle and can continue to shower your loved ones with gifts on special occasions.

Health Insurance 

This is one of the smartest ways to safeguard yourself and your family during medical emergencies. It is important to start early since the premium increases as you age. This is because medical complications and vulnerability to diseases increase as you grow older. If you have health insurance for longer, it also increases your chances of successful claims. You should also consider life insurance to protect the financial future of your loved ones.

You may be quite excited to earn your first salary. You may need to spend some money on essentials, and you should spend some funds on pampering yourself and your loved ones. However, if you’ve just started earning, your financial responsibilities may also be lower. So, it’s the perfect time to begin saving and investing. Also, when you do spend, you can use options like LazyCard by LazyPay, so that you can earn instant cashback on every purchase. You can check out the Facebook page to get a detailed idea of how it works.  

 

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