How to make your Investment Plan

How to make your Investment Plan

Imagine that you and your friends have decided to go on a road trip from one end of the country to another. One option is to just wing it. Get into the car and see what happens next. Nine out of 10 times, this ends up in a disaster (the only time it is successful is in movies). On the other hand, you could plan the trip well in advance and have a blast! Get a map, ensure there is plenty of food and water, have a spare tyre in case the car breaks down. And music, don’t forget to have good music.

Similarly, investing money can be seen as a lifelong journey. And to do it successfully, you need to have a good investment plan.

In this article, let’s find out how you can make an investment plan so that you can earn good returns over the years.

Anatomy of an investment plan:

1) Establish your financial goals

What are the different financial goals you wish to achieve in the coming years? Write down all of your goals on a list of paper.

Sam, a 25 year old engineer has the following goals:

Everyone has different investment goals. And the first step to achieve these goals is to identify them and outline them as clearly as possible.

2) Analyse the different investment options

The great thing about investing is that there are lots of options to choose from. A lot of investors think that it is enough if you identify a good investment option and put your money in it. That’s the wrong approach. Your investment strategy should be goal-based. This way, you can find the right avenues to invest your money.

For example, to create an emergency savings fund, investments in fixed deposits or short-term debt funds is a good option. For a long-term investment goal like retirement, investment in equity funds is more suitable because it has the potential to provide high returns.

3) Risk and return: Ensure there is a balance

When it comes to investments, there is always a degree of risk. Whether it is a savings bank account or the stock market, you cannot avoid risk. However, the degree of risk varies from one investment option to another. It is commonly said: higher the returns, higher the risk.

So, it is very important to choose an investment option that matches your risk tolerance level and also helps you achieve your goals. For example, you may not want to invest in stocks because of the high risk involved. But that doesn’t mean you cannot invest in equities at all. Through mutual funds (balanced funds, index funds), you can invest in equities and minimize your risk.

4) Diversification

Everyone knows the saying: don’t put all your eggs in one basket. But when it comes to investing, it is important to put this saying into practice. Putting all your investments in a single option is dangerous. For example, imagine you put your entire investment amount in equities. The market may be performing exceedingly well. But if the market crashes all of a sudden, you could lose your entire money. Try to split your investments into different avenues such as stocks, bonds and savings accounts. Another way to diversify is to invest in index funds.

5) Evaluate your progress

Remember that road trip you plan to take with your friends. Once you reach a certain stage, you may want to whip out the map (or Google maps on your phone) and see your progress. Are you on track or did your friend take a wrong turn and you are nowhere near your destination?

Similarly, you need to check your investments once in a while to ensure they are performing as per your plan. As you grow older, your goals may change. At such times, you need to incorporate your new goals into your investment plan and create a strategy to achieve these new goals. This way, you can ensure that your investments are working for you in the right way.


A plan helps you put your goals into a tangible and actionable form. By creating an investment plan, you can clearly see how much you have progressed year after year. So the first step of investing is to create a plan. And the important part is to stick to it, unless there is no other option but to change it (refer point 5).




Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.


How to invest in real estate

Everyone has financial goals. And buying a house for the family comes somewhere at the top of the list for most Indians. This is a very important milestone when it comes to investment planning. However, the scope of real estate investment is more than that. In fact, investing in real estate offers an opportunity to make good financial returns. Here’s how:1) Rent a house (or even a room)Don’t know anything about real estate investing? Don’t worry. You can start small if you are a beginner. Do you have a spare room or an apartment at the moment? If so, you can take in tenants and earn a steady monthly income. This is a good way to earn returns on an asset instead of letting it sit idle. So, even if you earn around Rs 5,000-6,000 per month, it can become a substantial corpus by the end of a couple of years. 2) Buy, fix, sellOne of the best things about investing in real estate is that there are loads of opportunities. Look around your city. There can be a lot of underpriced homes. For example, imagine you find an old house that is in a good area in the city. Here is what you need to do: Many people call this as house-flipping. 3) REITsYou can also invest in real estate through Real Estate Investment Trusts (REITs). These are companies that own commercial real estate such as apartments, hotels and retail spaces. All REITs are listed with the stock exchange and investors can directly invest in properties. Buying commercial real estate can be extremely costly and out of the reach of regular investors. Through REITs, you can participate in ownership of commercial real estate without having to actually buying commercial real estate. As a result, investors with budgets as small as Rs 2 lakh can explore the real estate sector and make profits. 4) Real estate stocksWhat if you don’t want to invest directly in real estate properties? Well, there is another way. You can invest in stocks that operate in the real estate sector. There are a lot of real estate companies such as DLF, Oberoi, Unitech that are listed in the stock market. By carefully researching these stocks, you can invest and earn good returns. ConclusionThese days, there are lots of investment opportunities for investors in the real estate sector. India is a developing country and there is huge potential for real estate. And the best part is, you don’t actually have to buy a house to invest in real estate!      Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.

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What is KYC?

Imagine you bought a new car on your birthday. You may be an extremely competent driver but that is not enough if you wish to take the car for a spin on the highway. For that, you need to have the right documents in place. Similarly, you may know all about mutual funds. But if you wish to invest, you need to be KYC compliant.What is KYC?KYC is an acronym for Know Your Customer. It is a process initiated by the Securities and Exchanges Board of India (SEBI) for proper identification of investors. This way, all financial institutions are aware of their clients.How can you be KYC compliant?1) Fulfil your KYC requirementsIn order to get started, you need to fill in the KYC form. This form would be provided to you by the mutual fund house. In addition, you will also be required to submit a few documents.These include:2) In-person verification Under SEBI rules, you can invest up to Rs 50,000 per year in a mutual fund with e-KYC using OTP verification process*. But if you were to invest a larger amount, you would have to undergo an in-person verification process. You can complete this process through your AMC or a distributor who is certified by the Association of Mutual Funds of India (AMFI).3) Check if information is updated Once you finish the formalities, you can check online if your data has been updated. Finding out your status is very simple. All you need to do is log into the KYC Registration Agency (KRA) website. Here, you will be asked to provide a few details such as your PAN number. If your details are updated, you get a message that you are KYC verified. After this, you can conduct transactions in mutual funds. If not, the status is shown as pending. In this case, you may have to wait until your information gets updated.ConclusionAfter the entire process is completed, you will be provided with a unique 14-digit identification number. This is known as your KIN or KYC Identification Number. So if you are not yet KYC compliant, it is best to get the process started as soon as possible. The sooner you get it completed, the faster you can start investing and accumulating wealth.       Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.*

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