Recent events like the pandemic, the Russian – the Ukraine war, the consistently falling rupee, and high inflation have proved why investing at an early age and systematically is vital and a significant requirement today!
Since it’s the only way to beat inflation and work towards wealth generation, here are 8 ways to invest in 2023 for beginners!
1. Know your financial goals
Every person has financial goals to achieve; whether it’s to cruise around the world or pay for your child’s foreign education. Everyone has them and everyone needs to work for them.
The first rule of investing is to determine your short-term goals like buying a car and long-term goals like buying a house to figure out how to work towards it based on your finances and spending.
When it comes to financial planning, it’s best to be realistic. Understand your goals and determine the best way to attain them without compromising your present needs!
2. Study your finances
Before investing a huge sum, it’s good to budget your finances and understand where your money is going. For instance, if you have an income of Rs. 45,000 a month and if you spend Rs. 25,000 on rent then it’s not feasible for you to invest Rs.20,000.
You have to take care of your utility bills, food, and other miscellaneous expenses. It’s best to pick a realistic amount for investing every month that you can pay consistently before starting a SIP.
3. Time your financial goals
Knowing how much time you have and need to achieve your goal is a crucial aspect of investing. Some investments have a lock-in period; suppose you choose an investment that has a lock-in period of 5 years but you need your money in 3 years, this can throw your financial planning off the charts.
So, it’s important to align your deadlines with your investments so that you can take care of all your needs on time.
4. Know your risk appetite
Some investments are riskier than others, some offer low to medium risks. Depending on your risk appetite you can choose the option that suits your financial goals and current needs.
Risk appetite depends on a number of factors like your running income, sources of income, financial obligations, number of dependents, age, etc.
5. Put your eggs in different baskets
You have probably heard this line more than enough to know relying on one financial tool like an FD Mutual Fund or ETF alone can be a huge mistake.
It is always beneficial to diversify your investments so that you can achieve your financial goals faster and more efficiently. Speak to an expert if you have trouble assessing the different investments for your unique goals!
6. Avoid impulse decisions
Many first-time investors make the mistake of investing everywhere without any specific goal in mind rather than the lure of lucrative returns.
While these avenues may be a great investment opportunity, they could prove to be a loss. So do your research well, understand your needs, and then invest your hard-earned money into schemes you can vouch for!
7. Ensure you have enough liquidity
Some investments have lock-in periods and levy extra charges for redemption before the set date. This can be a huge loss on your investment!
While you cannot foresee future emergencies, you can prepare for them with emergency funds and some liquidity, that is, cash in hand!
8. Market research is key
While the pandemic introduced various changes and led to the emergence of pharma companies like high-return investments, the winds are changing again.
Companies like manufacturing and logistics are making a grand comeback, especially in India with the start-up culture in full swing. So, know your market before making any big investments. If you have no prior expertise in share market research then contact an expert!
How you invest in 2023 should be determined by your financial goals and needs while keeping research at the centerfold! The gamut of financial advice and instruments has increased in the past few years, it is easy to get overwhelmed so seek help wherever you can to make the right choices!
FAQs
What are the top 5 sectors to invest in 2023?
The top 5 sectors to invest in 2023 are:
Information Technology, Pharmaceuticals, FMCG, Automobile Companies, Logistics, etc
How to plan investment in 2023?
The key to investing is knowing your time horizon, financial goals, risk profile, and lastly, diversification. Ideally, every month, every individual should invest an amount they prefer towards their financial goals to achieve them on time.
You can opt for a bunch of investments like mutual funds, ETFs, stocks, insurance, PPF, government programs, bonds, and even FD based on your financial needs. Always consult an expert so that you can plan and implement smartly!
Which sector will boom in India?
Watch out for sectors like housing, banking, information technology, pharma, and automobiles
