Hello Readers!
I hope you all are safe from COVID-19 infection!
Currently, people globally are dealing with the professional and personal changes that have suddenly appeared due to the massive spread of COVID-19 pandemic. Many have lost their jobs, and many are suffering from financial scarce. This whole COVID-19 pandemic situation that taught us the most important thing, the importance of being prepared for the future.
Not only people are hit financially, but this pandemic has also canceled all their planning that they must have made from the growth that one may have expected in their professional life.
There may be some individuals who must have planned to add some more in their retirement kitty as soon as they get their appraisal, but thanks to the COVID-19 pandemic, all their plans have got to an end. However, if you are one among those who don’t want to compromise on your preparedness for your financial future, then we would advise beginning by focusing on these three aspects:
SAVE MORE AS MUCH AS YOU CAN
It's not easy to plan ‘save more’ if you are getting lower-income and will get the same for a period ahead. Also, it is hard to plan to save more, if you have lost your job or you are at a stage where you have the responsibility for your children or your old parents.
While things might get good next year, for now, your utmost priority is to focus on increasing your monthly savings. The only way to do this is to reduce your expenditure. In this COVID-19 pandemic, outings in your leisure time have stopped completely, which means your expenditure on outings must have cut down, add this amount to your monthly savings. Even you can go on cutting the spending on things like gadgets, imported food, and beverage and even rethink the use of your car if you have lost your job or need to work from home at a lower salary. You can add these cuts spends to your monthly savings.
Saving more than you were previously will help you keep up your investments despite the loss of income and ultimately prevent a gap in your retirement basket.
ADD SOME CALCULATED RISK
Equity mutual funds are risky, but they can push your investment towards more growth without increasing your monthly SIP installment. Thus, you need to juggle out your asset allocation and put allocate more in growth assets like Equity mutual funds.
We know that it will be a risky game for you, but we advise, invest in some research or a good advisor, and then pick out the right choice from equity-oriented mutual funds. Also, you must go extending your investment tenure, not more but increase it by 2-3 years, this will give you a good chance to improve your retirement kitty without increasing your monthly SIP installment.
GET RID OF THE JUNK
At this time, you need to clean your portfolio and get rid of all those old investment and insurance policies that give you low returns or are getting more expensive to you. You can also go eliminating those funds to form your portfolio that is consistently under-performing. Do this even if you are making a loss because whatever money you can salvage can then be used to invest in more efficient long-term equity funds.
This is not the time to waste on funds that give sub-optimal returns, rather it is the time you need to focus more on better quality funds that have a higher probability of giving you close to expected return in the years to come.
Improving your retirement kit is important as this financial preparation is going to cater to your at least 25-30 years of post-retirement expenses. Thus, if you are close to your retirement, but you are unable to bring out the same kind of income, then we advise focus more on saving and investing in order to avoid any gap in your retirement basket.
For any kind of investment query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.
Happy Investing!
(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).