K. ARAVIND
“It’s easy to advise that it’s a good habit to start investing early, but it’s possible if you have the money to invest.” Such an approach to investment is taken out of the perception that a large amount of money is required to invest.
Many people are reluctant to start investing because they do not have enough money to invest. Those who take the approach of earning a very small amount of money often set aside even the smallest amount of money that can be earned.
But there is one thing that these people need to understand as the basic principle of financial planning – they can start investing no matter how small the amount. For example, to invest in mutual funds under the Systematic Investment Plan (SIP) every month, it is sufficient to set aside Rs.500 per month.
Waiting until you have enough money to invest will cause the investment to be delayed indefinitely. For those who earn only a small amount, there is no point in waiting for a large amount of money to accumulate to invest. The first step is to start the investment as soon as possible with the small amount of money that can be earned.
You should try to start investing as soon as you start earning income. Delaying the start of investment can lead to delays in the realisation of life goals.
Once you start investing, you need to make sure you do it regularly. Care should be taken to reduce costs so as not to hinder continued investment.
If we can reduce the cost by one rupee today, it is equivalent to getting one rupee extra tomorrow. Even if you could set aside a portion of the cost of watching a movie and wandering around the city to kill time during your holidays, it would be a saving for tomorrow. Small savings do not bring big gains in the short term. But in the long run it will make a big difference.
Care should be taken to increase investment as income increases. Many face rising expenditure as their incomes increase. This is because the expenditure hasn’t been adjusted according to the income or it is not taken care of. Therefore, if expenditure ins not adjusted according to the increase in income, it will not be possible to earn in proportion to the increase in income.
It is important to wait patiently for the investment to grow. Care must be taken to be patient according to the duration of the goals. Investors should be prepared to wait a long time to get the best results from investment methods such as Systematic Investment Plan. Investors should realise that the value fluctuations in mutual funds investing in the stock market are natural.
