To start your investment journey, you need to save up first. Then your saved corpus can be put into a diversified portfolio, which can earn you the maximum returns safely.
It’s easy to mix savings and investments as one! So, to set things straight, the difference between your monthly income and expenses constitute as a part of your savings. Whereas, when you put such surplus amounts into various asset-classes, that’s when you invest.
Not everyone has the risk appetite for the stock market. So, a passive investment strategy combined with good saving habits works well for those who can’t risk it all.
Need a money-saving tip? Here’s one: aim to save at least 20% of your income. It’s a tried and tested principle that experts around the world agree upon. After you’ve managed to save for several months, a gainful next step would be to look for investment opportunities in India that can generate higher returns for you.
Fintech is growing fast in India with a promise to improve personal finances for everyone. A variety of investment products are coming into the market every day. Alongside the well-known instruments like mutual funds and bonds, peer-to-peer lending is emerging as a promising option.
Saving is the most basic practice for healthy finances. Before investing big, make sure you have solidified your saving habits.
Here, look into some super simple saving tips:
A time-based goal gives you the motivation to save constantly. So set a number that you’ll need to save each month to achieve your financial targets. Common goals can be creating an emergency fund, a home remodeling budget, or your child’s education among other things.
Investment opportunities in India are plenty at the moment. And with a good saving strategy, you can take advantage of new-age lending investments. For instance, the amount you save every month can be invested in FMPPs, a freshly introduced AI-powered lending system from LenDenClub.
Diversifying your investments across a broad spectrum lowers risks and maximizes returns. While saving is the first priority, investment is right next.
Recording your expenses gives you an idea of how you spend. By doing it, you can figure out the exact numbers for your monthly recurring expenses. Non-essential spends show themselves by this as well.
Once you have all essentials and non-essentials in view, you can start asking some important questions. Can I lower electric bills? How much did I end up paying in late fines on bills? Will a quarterly subscription on the internet save me something? Did I spend more than necessary on take-outs?
Getting answers to such simple questions gives you a broad picture of your spending habits and helps you understand the unnecessary costs that could go into savings!
Finding ways to cut spending is common sense. However, it can be tricky to do so. There’s no shortage of distractions around, crying for your attention and money.
If possible, work from home a couple of days a week to cut down traveling expenses. Cancel subscriptions that you don’t really need. Is there a scope to use public transport instead of taking a taxi?
You’d be amazed at how much you can save by just cutting some corners around. Let’s say you spend ₹1,000 every Sunday, totalling to ₹4,000 per month or ₹48,000 every year. Now, if you cut down such Sunday spends to every alternative weekend, that saves you ₹24,000 yearly or ₹1,20,000/- over the next five years. To top this, if you lend this money with LenDenClub’s FMPP, that leaves you richer by close to ₹1,70,000/- which otherwise was money entirely spent!
You need to include saving in your budget ahead of every month’s start. Start low by setting aside 10 percent of your income. Aim to increase that to 20 per cent.
When you create your budget with savings included, you limit overspending. After all, saving is really a habit. But you should not just limit your savings potential at that. If your monthly paychecks can get a raise, so should your monthly savings targets. Bonuses and salary raises are great ways of saving incrementally. After all, such incremental investments can bring you closer to your financial goals in the longer run.
Where you park your money also matters in ensuring your financial success. Not all saving accounts are the same.
A typical recurring deposit scheme will pay higher interest than a general savings account. But of course, that is nowhere close to what your investments could deliver.
You can choose to use one of the best apps for investment like LenDenClub to earn high and returns on your saved money. LenDenClub’s FMPPs have the potential to generate up to 12% returns and that with the compounding effect results in significantly higher yields!
Foresee an impending expense in the near future and save for it. If you need to buy a vehicle down the line, then save for it from now.
Remember your long-term goals as well. Financial priorities are best determined with a holistic view. Not all your goals can have the same importance. So, be prudent here.
If you can manage to build good savings, you can invest that in a high-yielding portfolio. Your options are no longer limited to fixed deposits or mutual funds. Lending money through a trusted platform is a good option to consider.
Peer-to-peer lending is an emerging market and it’s time to take advantage of it.
LenDenClub is a growing platform for lenders and borrowers. It uses AI to allocate your money to credit-bureau-verified borrowers. LenDenClub’s lending infrastructure evaluates borrowers’ creditworthiness by taking into consideration over 200 different data points.
Moreover, it uses a hyper-diversified model to minimize risk for money lenders where your invested money is divided across a number of borrowers. Such a division could go to as low as ₹1 per borrower! With more than 20 lakh investors lending through this platform it’s time to join the revolution.
The Fixed Maturity Peer to Peer investment plan or FMPP, as stated above, delivers 10 to 12% per annum. It has an AI-enabled matching system, which leaves very less room for defaults and mitigates risks.
A large part of the Indian population is left out by conventional loan providers like banks and NBFCs. LenDenClub is filling that gap by creating a direct peer-to-peer ecosystem.
There are no middlemen here and allocation is done impartially in a hyper-diversified portfolio. With a rising number in the investment class looking for opportunities to invest other than banks and stocks, such instruments will prove to be a boon.
Saving is the foundational principle to growing your wealth. When you focus on saving you are able to accumulate for investment.
Nowadays, there are many investment options available in India. Unlike a few years ago, when FDs and equities were the popular choices among people, various new-age investment options like P2P lending have emerged. The best part about these investments is that they have the ability to balance the risk and returns, which most investors find hard to achieve.
On top of that, online marketplaces like LenDenClub further simplify the process for investors. Let us see how –
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