We need to start planning for our retirement when we are young and energetic. The increasing life expenses have made it a major necessity that we plan for our future so that when our earnings will be lesser, we may be able to meet our livelihood with ease.
With ever increasing advancements, the modern lifestyle has become expensive. Our daily spending is rising and most of the people around us are continuously struggling to keep pace with the mounting expenses.
But will we be able to do the same amount of hard work when we grow up in age (post-retirement)? If you have an assured source of income, then it may not be a problem for you. But what about those who will dwell on the retirement pension only?
If you claim that you are “saving for retirement”- do you think your fixed deposits or recurring deposits are prepared enough to tackle with the increasing annuity, inflation and changing the value of money? It may never be sufficient to meet the challenges of ever-increasing lifestyle expenses.
Therefore, we recommend our readers to seek out for subtle ways of investment that will help them in dealing with increasing living expenses. The fruits of this practice will be borne at a time when we will really need them. So let us learn about how we should plan our investments so that we can deal with the challenges of an increased cost of living in the future.
Distribute Your Investments, Make a Portfolio
Never ever invest all your money into one type of investment schemes only. We have seen various cases where people invested all their savings in one kind of financial scheme and faced the repercussions. There can be various end results to it.
– One can get stranded with the money stuck in some lock-in period with minimal growth
– There can be no significant growth to their money if the particular fund doesn’t show growth
– There are funds that can even reduce over a period of time which means a negative balance!
Therefore, we suggest our readers to consider distributing their money into different investment schemes.
Consult a portfolio manager for optimal guidance. He or she may be able to guide you with investment ideas suiting to your income and lifestyle.
Consider Investing Money in Life Insurance
It not only gives you good returns but also helps in ascertaining the future of your loved ones. Our life is uncertain and tragic death can happen to anyone, anytime.
Life insurance schemes have turned out to be lifesavers for people who have lost their primary earning family member in unfortunate events. Therefore, life insurance schemes are highly recommended.
Start Early
There are various benefits of starting early investments in life. One is that you will be able to accumulate more wealth with time. Second, when we are young our responsibilities are lesser so we can save a significant amount of money every month and it helps us get into a lifestyle habit. Another benefit of starting early with investments is that the longer the money stays into investments, longer is its potential to grow!
You can read various investment related news, articles and journals to polish your subject knowledge about investments which will help you in initial investment strategies. Most of the investments need your patience and time to start showing effectual results. The optimal returns will increase the value of your money and thus you will not have to target your income when you will need to cater to the rising cost of living.
Know Where You Invest
There are so many financial instruments available in the capital markets these days that a layman often finds himself amateur to deal with investments. When we consult a portfolio manager, they suggest us different plans and most of them have technical financial jargons and terms.
In such a scenario we will suggest our readers be very firm with their investment options. Invest your money in only those areas which you can easily understand and can deal with (if needed ever). You should not be stuck with unfamiliar clauses in the investment schemes when your portfolio manager switches his job or company. Therefore, invest only in those plans which are understandable by you.
For example- ULIPs and debentures are not commonly known to non-financial people but everyone can easily understand the implication of life insurance schemes. In fact, life insurance investments are highly utilized as they are reliable and trustworthy. Therefore, better invest your hard earned money into those policies where you have the knowledge of the flow of money and its functional benefits in future to you and your family.
Detain the Habit of Insignificant Spending, Make it Investments
We meet many people who complain about lack of savings but you will find them spending on insignificant things every day. Such as buying premium gaming or other apps on phone, eating junk food outside every other day, buying in the sale just out of shopping spree without the actual need, spending on tobacco or smoking to a large extent etc.
These things appear insignificant but if we start making a note of our habits of discretionary spending, they accumulate a significant amount of wealth at the end of the week or month. For example- spending $10 a day on your leisure activities can be $300 a month!
Be watchful of your spending habits and use this money as investments, they will generate growth with the good amount of returns in the future.
Conclusion
Rising inflation and cost of living are always going to affect our lifestyle habits. With proper planning and investment, we can gear ourselves up to meet the challenges of modern living. The prices are rising everywhere these days. We may not feel any remarkable difference now but we need to plan for the future so that we are always prepared to deal with the ever-changing economic dynamics of the countries.
Increased options for investments have opened the doors for everyone to go out and seek opportunities for investments. But with knowledge and proper information, we can find the best strategies for ensuring our money to help us deal with ever-increasing life expenses.