“It’s not only about how much you save or for how long you saved, it’s about how hard that money worked for you.”

Only a small number of people make ‘investing’ their job. Everyone else approaches it with varying degrees of excitement, fear, skill or recklessness. Almost everyone we’ve ever met has a story to tell about the ‘cycle of investment regret’ – investing in something at a high price and sometime later selling it for less. So what can we do about it?

Right investment is your most loyal child and that is the reason why investors must know why they do what they do. They must educate themselves on the difference between uncertainty and risk. We discourage people on keeping uncertainty but they must take risk on their investments – at least with a part of it to comfortably achieve their life goals. Not taking risk with your investment will result into:

1. Sacrificing current life style – Safety and risk oppose each other. Safe returns demand increased investment in order to achieve life goals and that impacts the current lifestyle, lowering it most often.
2. Sacrificing the dream – It can be a case due to inadequate corpus accumulated because of inappropriate asset allocation and inadequate return on the investment.
3. Incurring debt at inappropriate stage of life – Inadequate corpus at the time of goal due to extremely conservative investment may make you incur debt at inappropriate stage of life. This brings the possibility of all other goals not falling into place.

Following factors are the most important factors in investment planning:

1. Inflation – It is the biggest enemy of your money. This enemy depreciates the value of your money and you must beat it to win over it.
2. Tax – The second biggest enemy. It changes its face very often. You must save it to fight it but at the same time you can’t avoid the biggest one – inflation. You must have a combination that fights both of them together.
3. Real Rate – This is the residual part of return that an investor earns after paying the above two. Inflation is beyond your control but taking higher returns by minimising the tax part is well within your control. This part of return will determine your pace of becoming wealthy!