This Diwali, Correct Your Financial Mistakes and Put Yourself on the Right Track
Last Updated : Oct. 26, 2019, 12:01 a.m.
Diwali, the festival of lights, is celebrated with much fanfare across India. Amidst all the celebrations, people also worship goddess Laxmi for their financial well-being. But if you have committed some mistakes in your financial life, prayers alone won’t work for you! You need to step in and fix your mistakes before it gets worse for you. So, on this auspicious occasion of Diwali, we suggest some solutions to the financial mistakes you might have committed. Let’s read and implement those solutions.
Have Gone Overboard with Your Credit Card? Start Using it Wisely to Stay Away from the Debt Trap
Shopping with credit cards is considered good provided you do it judiciously. But if you have gone the other way round, the dues must have been too high for you to pay in full, forcing you to pay just the minimum due to avoid late payment charges. But doing so will most likely have piled on the debt at a massive interest rate of 30%-45% per annum. Don’t let this problem go on to haunt you further. Pay the entire outstanding with your savings and start using the card wisely from thereon. If you don’t have the savings, you can opt for a personal loan to pay the same. The loan will come at a much lower rate of 11%-20% per annum.
Paying More on Your Existing Home Loan? Opt for Balance Transfer to Lessen the Burden
It feels good to stay in our home and enjoy all the luxuries it provides. But if that comes at the expense of higher monthly obligations i.e. Equated Monthly Installments (EMIs), one must think of a balance transfer to reduce the burden. Well, it’s a process by which you can switch the existing outstanding balance to another lender at a lower rate of interest . This will not only bring down the EMI but also interest over the loan tenure. Even a difference of 0.50%-1% in the interest rate can make a substantial difference to the overall repayment.
Facing Losses on Your Direct Investment in Stocks? Take the Help of an Investment Expert
It’s always fascinating to invest in stocks as they can generate wealth much quicker than any other asset class. However, direct investment in stocks can be risky if you don’t possess the market knowledge. If the market sentiments turn bad, you could face losses on your investments. In case you are bearing the loss on your stock investments, it’s time you take the advice of an investment expert i.e. Wishfin. Our advice would be to just wait for your investments to jump and then take out the same to invest in a mutual fund that is under the constant watch of the fund managers. These highly seasoned professionals read the market thoroughly and make those smart moves to propel your investments. However, mutual fund investments are also subject to market risks. But the diversification of these investments ensures you sail through the market fluctuations to generate good corpus over time.
Sticking to Just One Financial Instrument to Build Your Retirement Corpus? Start Investing in Multiple Instruments with Strong Fundamentals
A lot of us invest in just one asset class to create a corpus for the future. Either we invest in the safety of fixed deposits or the profitable yet risky proposition of equities. If you’re committing such a mistake, it’s time you follow the saying, ‘Don’t Put All Your Eggs in One Basket’ , by investing in different instruments. Choose investments according to your financial goals and risk appetite.
If you want to generate a retirement corpus and have a moderate to high risk appetite, you can’t afford to invest in fixed deposits alone. Such deposits will earn you around 5%-7% and won’t be sufficient to combat inflation that might prevail during your retirement days.
You must also look to invest in top-performing equity mutual funds that can appreciate the growth of your investments significantly over time. You can go on further by investing in an equity-oriented hybrid fund too. This fund invests in both equity and debt instruments to ensure capital appreciation as well as generate regular income.