How to start investing: 3 steps to biggest financial gratification

Jun 01, 2018, 02:09 PM IST

Savings is a common habit in Indians and they are some of the world's biggest savers. But there are very few who are into systematic savings - savings that produce tangible results on the ground. Here are a few tips on how to do that:


Reasons for investing: One of the biggest reasons for saving is children's higher education, their wedding and finally retirement planning for self. Younger people plan and save for a house or a car. This is goal-based investing and it is almost always successful because when a goal is set, you are emotionally invested in the process and tend to save diligently to meet the goal, according to a DNA report.


Money required: After setting a goal, next step is to estimate how much money is needed to be accumulated to achieve the goal. To achieve this, two factors must be kept in mind - time and inflation. Start with the object of desire's cost today. Next, see how long it will take you to accumulate that sum. And finally, factor in inflation.



Constructing portfolio: One must consider personal risk profile. Ask how much can be comfortably invested in volatile assets. Factoring into the equation your risk capacity is a must. You must also ensure your existing investment portfolio and financial goals are not affected adversely.