As we all are aware, creating wealth required a fail proof planning from the beginning and have disciplined actions. At a very first, understand that, creation of wealth is not an hour, day or some months process. Below given, step by step points will certainly make you able to identify, plan and achieve your goal.While dealing with wealth creation, one should identify the possible loop holes and incidental situations that may cost him money. To avoid any possible withdraw from investments that you have made as the part of your wealth creation, a structured planning required.1. Understand that wealth creation is not an hour, day, month or some years process. It requires time and patience.2. Do have a goal. Find out how much money you want to meet that goal and invest a proper proportion each month to achieve that goal.3. Start investing early. Remember the thumb rule, subtract your age from 100 and invest that percentage to equity and equity related instruments. A young person in the age of 25 should invest his major portion of savings to the equities, which provide higher returns compare with any other investments. When reaching to the age of pension, he should gradually convert the money invested in equities to debt instruments like FD, to give security to his/her money.4. Always have a long term perspectives to your investments. Money requires time to grow. A person requires patience to wait and see that growth.5. Diversify money properly between equities, debt and instruments that give hedge against inflations.6. A good equity portfolio will diversify between large, mid and small cap funds in the proper proportion. This will provide security to him from falling or fluctuating market.7. Equity investment requires time to research and find out proper investing opportunities. If you are not having time or doesn’t have enough knowledge on direct stock investments, go investing through mutual funds.8. Don’t over diversify your portfolio. This can give lose than profit. Or you will not be able to manage/monitor your investment correctly.9. In case of equity, a portfolio of 20 to 25 stocks both, large, mid and small cap companies with enough growth potential, is good.10. Once you find a good stock, buy the maximum possible.
11. Use this article to get good idea on How identify a good stocks
12. If you are in mutual funds way, consider to by 5 to 8 diversified fund, 3 to 4 debt funds to diversify the portfolio properly. To get international exposure, you can buy international funds as well as gold and real estate mutual funds to hedge your investment against inflation.13. Always use the SIP (Systematic Investment Plan) path to invest through mutual funds.14. You can buy index funds to protect against fluctuations in the market.15. You can buy ETF both gold and equities to get maximum profit from stock market with less knowledge.16. Don’t follow public and don’t believe analyst report or tips. A secret is, if you know some equity will outperform soon, will you give that tip to anybody? No. Same as, researchers giving tips always without holding the stocks personally. Your lose will not affect them so who ever has mouth, they can tell whatever they want and to any body.17. Buy gold in the form of Gold ETF, coins, bars and even gold mutual funds will be a good hedge against inflation.18. Real estate investments are always profitable. This not only providing the hedge against inflation but also give you handsome returns in a long term run.19. Have an amount equal to 12 month of your monthly take home salary and reserve it into a savings account to meet any emergency that may occur. i.e. losing job etc.20. To meet all the major future expenses, buy enough insurance coverage to yourself, family.21. As a thumb rule, have a term policy (which will give higher coverage with minimal premium) yourself. An advisable coverage amount should be 5 times or higher than your annual salary.22. Have medical insurance for yourself and family to meet all medical expenses that may happen.23. Get insurance policy against home loan once if you have. This premium amount will be comparatively less but give sufficient protection to your family once if anything bad happening your life and the home loan exists.24. To protect your assets, buy insurance for home and vehicles that you have.
25. If you are buying a ULIP as part of your investment plan, compare the do and don’t using this article, Self assessment questionnaire for a ULIP buyer.
26. Teach your kid about money management using small games or ideas.27. Monitor your investment properly at least once in a month. This will make able to exit from losing instruments and add new profitable members to your portfolio.28. In the space of debt, have a habit of adding FD’s in each year in the name of your Kids and spouse.Remember the above point and have a good financial plan as per your goal. Again remember, wealth creation is a long time process. Patiance is a must to acheive the goal properly with good decisions and actions. Happy investing..
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