There are a zillion pieces of financial advice that your near and dear ones will give you but this blog will give you five investment tips that are sacrosanct and will truly help you get the most out of your money. No matter where you stand in your journey as an investor these tips will give you a good boost into the new year.
January 10, 2021
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The new year is here and as with every year, 2021 also brings with it a slew of questions around what to invest in and how. There are a zillion pieces of financial advice that your near and dear ones will give you – I, on the other hand, intend to share only five. These are investment tips that I feel are sacrosanct and will truly help you get the most out of your money. No matter where you stand in your journey as an investor these tips will give you a good boost into the new year.
1. Get A Wealth Coach
A wealth coach isn’t a bank executive who is there to take a bite out of your profit in the form of commission by selling you bad financial products. He or she is someone who gains when you gain and has your best interest in mind because your financial success is in their best interest as well. One of my personal goals with the Cube Wealth App has been to provide everyone with trustworthy and reliable investment advice. As part of this effort, we connect investors with our internal wealth coaches for absolutely free.
This is crucial for anyone who is serious about investing. Just like a great athlete needs the right coach to help them find their best form, you need a wealth coach. A wealth coach is someone who genuinely analyzes your financial needs, helps you set up an emergency fund, identify your financial goals, and then suggests the best way forward for you as an investor. I, of course, recommend the Cube Wealth App to anyone looking for great investment advice!
2. Get Good Health and Life Insurance
Note that I say get “Good” Insurance. If you’re young you may not have thought of this at all and if you’re old you may feel like it’s too late to bother about this now. But, everyone should get themselves a simple Term Life Insurance – just pure life insurance, nothing more nothing less. This is to ensure your near and dear ones are financially secure in case the worst happens. There are many complicated insurance products out there but, you must insist on getting simple term insurance from a reliable insurance provider. Read user reviews, see what the claim settlement ratio across your top picks is – this should help you narrow down to the best one.
Along with this, you will also need to get yourself a good health insurance plan. The thing is, none of your wealth will matter if you don’t have the health to enjoy it. So, ensure you don’t cheap out on this front. Invest in a high-quality health insurance plan – one that covers diseases you don’t think you’ll have – trust me, you’ll thank yourself later. Do your research and see which hospitals your insurance includes – make sure the ones closest to you and those with multiple branches are included. Also, check which diseases are NOT covered by your health insurance as well – it may help you pick the right one for you. If you have a family history of any major diseases it might be a good idea to get a separate cover for them or set up a micro fund in the form of a high interest fixed deposit for this purpose. Secondly, ensure your immediate family has health cover – oftentimes it isn’t our own ill-health but that of our near and dear ones that can bring financial strain into our lives. It may be a difficult conversation to have with your parents, in-laws, or siblings but ensure you don’t have any family members with no health cover.
3. Invest Regularly via SIPs
To say that you must invest using SIPs is no revelation and unless you live under a rock you’ve been bombarded with enough advertisements telling you that mutual funds are right for you. However, there are still a lot of investors who shy away from Systematic Investment Plans. My specific advice to you is: Invest across multiple asset classes based on your time horizon and risk tolerance via SIPs. You must understand the magic that SIP brings to the table for you as an investor. Firstly, you can start by investing as little as Rs.500, so not just you but even a college student today can afford to pay the monthly investment amounts.
Secondly, you will reap two key benefits by investing via the SIP route. The first benefit is that of Rupee Cost Averaging – as you invest the same amount month in and month out despite market fluctuation your overall cost of the purchase goes down. The second benefit is that the interest you earn on your mutual fund corpus gets compounded. By investing across asset classes you can build a healthy portfolio that is diversified and aligns with your investment goals. You can use a simple SIP Calculator to see wealth gain projections and understand how well this will work for your investment – the Cube Wealth Blog has a SIP Calculator and I would appreciate it if you use that for this purpose.
If you’re already invested in Indian Mutual Funds you might want to consider global Equities. This will give you a clear edge simply because you’re invested in more than just the Indian Stock Market. Think of it as diversification – only this time, you’re just buying a different category of Mutual Funds, you’re investing in a completely different stock market – one of a global superpower that is likely to continue prospering.
This is something you should definitely consider as it will let you invest in companies that you truly believe in and whose products you use and understand. Key benefits of such an investment are diversification across multiple geographies which helps reduce the overall risk from concentrating your investment in one location. Besides this, the U.S. markets have outperformed the Indian market over the past decade by giving much higher returns to investors. On top of that (as if you don’t already have enough reasons) this will help you hedge against the depreciation of the Rupee in comparison to the US Dollar.
You can also watch Cube Wealth’s US equities guide to understand how to go beyond India and invest in stocks of companies you know very well, such as Apple, Amazon, Starbucks etc.
This is a crucial factor that will have a clear impact on your financial future. A lot of people leave investing to reminders and their memory. This is a terrible idea because there is a literal cost to pay for inconsistent investing. You need to be consistent and patient when it comes to investing. There are no “get rich quick schemes” that work and there is no other path to success in terms of investing besides regular, long-term investing. To ensure you make a plan and then stick to it, it is essential to automate your investments and free yourself from the strain of having to remember to make payments. You can do this with the help of a simple wealth management app that will take away your investing woes. This will truly make your investment journey stress-free and rewarding.
As I said at the start, there are a zillion other pieces of advice that others will dispense. However, thanks to my Fintech Background and current experience as the Founder of the Cube Wealth App, I’m certain the 5 tips given above will be more impactful than you may think. I truly hope these 5 simple tips help you enter 2020 with a solid investment strategy. I wish you hefty returns and a happy new year.
Founder & CEO of Cube Wealth, Satyen is a Stanford Alum in computer science, HCI, and tech entrepreneurship. He spent 15 years in Silicon Valley learning his craft with Apple and Frog Design. He then embarked upon his own startup journey in the US & India. He is also the founder of Citrus Pay – India’s first digital payment gateway. A successful venture that sold for USD$130M in 2016. Now, Satyen is simplifying wealth creation for busy professionals with Cube Wealth, the Financial Freedom App with a smart Perfect Portfolio Planner feature.
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