6 Things To Do Before You Start Investing

Investing is the need of the hour.

Inflation is on the rise and you need to make sure that you are beating inflation by investing your money.

But before you start investing, you have to secure the money you already have. Because if you don’t do that, then you and your family can end up in debt because of some unforeseen event.

Which can jeopardize your financial future instead of giving you financial freedom.

And I don’t want that to happen to you!

So make a note of all the 6 things that you must do before you start investing.

Lets go!

Create A Budget

The journey of achieving financial stability begins with creating a budget. A monthly budget will help you understand your monthly income and expenses which will help you understand how much you can invest on a monthly basis. You can also see where you can cut down your expenses to increase your investment fund.

Pay Off High-Interest Debts

No investment strategy pays off as well as eliminating high-interest debt.

Because most credit cards charge as much as 18% or more if you don’t pay off your balance in full, and you’ll rarely get returns of more than 18% on any of your investments.

So it doesn’t make sense to invest when the profits on your investments are lesser than the interest that you pay on your debts. You’ll ultimately be making a loss.

That’s why it’s a good idea to pay off high-interest debt before you start investing.

Create An Emergency fund

Life is uncertain. Emergencies like job loss and a pandemic arrive unannounced and require a lot of money to navigate through these unexpected events. An emergency fund is essentially money that’s been put aside to cover these unexpected events. This will prevent you from taking a loan and going into debt.

Ideally, you should save at least three months of your monthly expenses in your emergency fund

Get Yourself Insured

Getting insured is one of the most important financial decisions as Life & Health Insurance safeguards you & your family’s future.

No matter how much money you have saved, imagine depleting all your savings on medical bills or not leaving enough funds for your family after your demise.

Getting yourself insured will ensure that you are financially secure to face any type of problem in life

Define Investment Goals

Before you actually start investing, what you need to ask yourself is why do you want to invest.

Is it to retire early, pay for your child’s education, or to buy your dream house. You need to have clear goals in mind before you start investing.

Defining your goals won’t just help you stay on track, but it’ll also help you decide where to invest to meet your goal within your timeline.

Which brings us to the last but very important step:

Explore All Investment Options

As an investor, you have to choose the investment option that best suits your financial goals, your timeline for reaching your goals, and your risk appetite.

And in order to do that, you need to know about all the available options and the pros and cons of each of them.

Final Thoughts

These days, anyone can start investing by simply opening a Demat account online within minutes. However, you should not start investing before you create a budget, pay off high-interest debt, create an emergency fund, get yourself insured, know your goals, and are aware of all the investment options available to you.