Financial Education

How to invest the right way? 5 things you need to know

February 4, 2021
How to invest the right way? 5 things you need to know
  1. Do a financial audit
  2. Ask yourself or your investment coach, are you financially fit?
  3. It will give you a clear view of the true state of your finances and may also identify areas where you can make savings
  4. Pay off your debt
  5. get rid of all your debts; credit card, car loan, personal loan, home loan, etc
  6. if you have high-interest debts, you should be paying those off as your highest priority, far above any sort of thoughts about investing
  7. Have an emergency fund
  8. This is the money that you put aside for emergencies. Establishing an emergency fund must be a priority before you start investing.
  9. As a thumb rule, you should build an emergency fund which should be greater than at least three times your monthly expenses.
  10. Set goals
  11. What are you investing for? What are you going to do with the money?
  12. One of the key principles of investing is to never invest without a purpose. Differentiate between short-medium and long term goals.
  13. Get health insurance/coverage
  14. ensure to get adequate coverage for both yourself and family members
  15. Experts suggest one should have insurance cover of at least 10 times of one’s income
  16. Being medically insured can help you avoid facing financial instability in the future and enables you to get the best health treatment

Additional: Seek professional advice (financial advisor or planner)

  1. He/she will be able to point out what’s missing from your financial plans, and help you identify financial goals and how your investments may achieve them
  2. Even if you plan to have an advisor handle your investing, you should still take the time to understand the things that your money is going to be invested in. Simply trusting someone else to handle it is usually a bad move.
  3. How much risk do you want to take when investing in shares, companies or money? There is a simple rule for investing. The higher the return, the higher the risk. The lower the risk, the lower the return. Anyone who tells you otherwise is wrong and is only acting in their interest and not yours. It is important to keep this principle in mind when you are considering buying shares or investing in companies. Learn more about how you can recognise dubious financial advisors.

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The content in the blogs is solely for general information and to help potential clients get an idea of how we work. They are not recommendations that should lead to the purchase or sale of assets and are not investment advice. Marmot.Finance cannot judge whether and how the statements made fit your investment objectives and risk profile. If you make investment decisions based on this blog entry, you do so entirely at your own risk and responsibility. Marmot.Finance cannot be held responsible for any losses you may incur as a result of information contained in this blog entry.The products mentioned are not recommendations, but are intended to show how Marmot.Finance works and selects such products. Marmot.Finance is also completely independent and does not earn money in any form from product providers.

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