- Seek an adviser
- Make a plan
- Check your risk profile
- Define your goal
- Allocate funds
- Choose an online service provider
- Review and re calibrate
- Estimate gains and tax
- Move investment to liquid asset
- Realize the dream
Step 1: Those who find a friend, finds a treasure. This old adage holds good when it comes to selecting a good adviser who will become a friend, philosopher and guide. This one crucial step makes a big difference in the entire plan. A major section requires a hand holding to reach the goals. It will be trying to ride a plane without a pilot. So have a trained adviser next to you, he can direct you better. This is best strategy to prosperity
Step 2: You need to make a plan. Dreaming alone will not take us anywhere. You need to plan your finances, cash flows and decide how much you can spare to start the investment vehicle. If there is delay then more the decimation of fortune. A 1 year delay will reduce the fortune by 15% and a 5 year delay can reduce the fortune by 50-60%. So time is more valuable than Money!
Step 3: Before investing, check you risk profile and choose portfolio based on your appetite to risk and expected returns
Step 4: Define your goal and stick to it. The plan to invest cannot change with time
Step 5: Allocate your funds. Most people fail to plan and half of them fail to execute what is planned. There is no benefit if you plan and never started investing due to bad market, different views. When the investment is long term there can be little or no impact due to change in timing over the next few months. So don’t delay. Start moving
Step 6: Once you allocate funds, chose an online service provide who can guide and advice to invest through online that has the convenience of doing it with ease and better control. Move to an online investment and tracking of portfolio that you can check and transact on the go
Step 7: Review funds with the adviser if there are divergent movements in markets and check if you are on course. Review once or year or may be once 6 months Course correction is key to success but some investment can remain untouched for many years based on category of investment such as large cap fund
Step 8: Estimate your gains and tax to audit the changes in income tax policies to check if you can optimize your net gains or profits. The income tax rules are subject to change and once can plan to save tax. In the last year there was the benefit of grand fathering of mutual funds that provided an opportunity to book gains and plan your investment. So keep a tab on such development and seek your advisor help
Step 9: As you keep moving towards the goal (check your goal tracker) you may wanted to start moving your investment from high risk category to low risk in a systematic way if the unrealized gains are far more than expected. This will ensure to protect the yield and achieve the goals so that the short-term volatility does not affect our goals
Step 10: Realize your dream by deciding to redeem your investment to pay for the goal. There could be chances that you may need the funds in staggered manner over the next 3-4 years as in the case of education or buying your house. So you may chose to redeem partially to avail better yield or performance
