Take Calculated Risks to Improve Your Finances

NO RISK, No GAIN – a line that inspires many to take risks in their lives. While some succeed, some don’t while taking risks. Even then, there’s no harm in taking calculated risks. You can take the same with regard to finances too to earn more and feel assured at the same time. All those rich people that we see must have taken risks as well as used their brains to be where they are now. We need to do that too to prosper in our lives. In this post, we will tell you how taking calculated risks can win you your financial game.

Some Financial Instances Where You Can Take Calculated Risks

Applying calculated risks successfully would depend on what you want to achieve with/on your money. We’ve told the same in reference to some of the financial moments you may face. Let’s check!

Want Corpus for Marriage, Education & Retirement? Take Calculated Risks with Stocks

You need a hefty corpus to meet all these life goals. None better than trusting the power of stocks to do so. Stocks generate inflation-beating returns and are thus considered appropriate for these life goals. But investing in stocks just for the sake of it would mean these life goals remain unaccomplished. Stocks are highly volatile, and if you’ve chosen the bad ones, say GOODBYE to these life goals! You’ll most likely lose money.

There’s a need to choose stocks based on the performance of companies issuing the same, prevailing market forces & triggers, etc. Even these stocks can fail, but you can take calculated risks with the same to meet life goals – marriage, education, retirement, etc.

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Don’t think you can pull this off on your own? Consider investing in stocks through mutual funds that are supervised by competent fund managers. These managers steer your investment ship at all times. The risks are even here but fund managers look to even that out. All you need to do is choose the best funds that have given outstanding returns to their investors consistently.

Have Chosen Debt Instruments Being a Conservative Investor? You’ll Still Need to do THIS!

Conservative investors’ hearts pump up and down seeing the fluctuations of stocks. So to feel at home, they trust debt instruments more even if they yield them much less. While stocks can yield you astronomical returns, debt instruments would hand you conservative returns of around 7-9% per annum. Debt instruments include bonds, debentures, money-market instruments, etc. You can invest in these directly or through debt mutual funds. However, debt papers issued by the cash-strapped infrastructure major IL & FS turned negative a few years ago. As a result, many invested in these papers lost money.

So here too, you need to take calculated risks by choosing the debt instruments with A ratings. Such ratings denote the highest level of solvency, which helps companies pay back their investors on time. Many credit rating agencies such as ICRA, Moody’s, Fitch, CARE assign ratings to the companies’ debt papers. See which papers have got A ratings from these agencies and buy them through mutual funds.

Credit Card Debt Piled Up to Dangerous Levels? Here’s What You Need to do

Credit cards when used impulsively can create more horror than joy. The piling of interest at 30-40% per annum on revolving credit keeps raising your credit card bills beyond comfort. Yes, paying the minimum due amount, constituting around 5% of the outstanding credit card balance in a billing cycle, relieves you from late payment charges. But the debt only enhances. Don’t let this worsen. Taking a personal loan which can be given at an interest rate of around 10-20% per annum is one such solution for you. Even this is a risk but a very calculated one as the interest rate on a personal loan is much lower.

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Personal Loan Interest Rates May 2022
Fullerton India14.00% - 24.00%
HDFC Bank10.25% - 17.00%
ICICI Bank10.50% - 17.50%
IndusInd Bank11.00% - 23.00%
Kotak Bank10.75%
RBL17.50% - 26.00%
Standard Chartered Bank11.00% - 12.50%
Tata Capital10.49% - 14.25%
Home Loan Interest Rates May 2022
Axis Bank6.75% - 7.20%
Bank of Baroda6.75% - 8.25%
Citibank6.65% - 7.40%
HDFC7.00% - 8.10%
ICICI Bank7.10% - 7.95%
Indiabulls Housing Finance Limited8.65%
Kotak Bank6.55% - 7.10%
LIC Housing6.66% - 7.90%
Piramal Capital & Housing Finance10.50%
PNB Housing Finance6.75% - 9.25%
Reliance Home Finance8.75% - 14.00%
State Bank of India/SBI6.70% - 6.90%
Tata Capital6.90% - 8.75%