Investors like Buffet have made investing in the stock market look like it’s a merry-go-round when it is actually taking a curvy rollercoaster. When you look at the end product of where successful investors are now, it might seem like financials aren’t a problem when setting off into the stock market. But is that really true? What were the roots of successful investors? Every successful investor today came into the market in the nudge to attain a particular financial goal. So what is yours?
– Is your financial goal to buy a house or a car?
– Or is it to save up for retirement?
Come up with a strategy
Whatever your financial goal could be, I would say the logic to attaining it through the stock market would be through ‘the relevant plan.’ The stock market has been a scarecrow to investors who have not had an edge of at least a small amount of risk, but it has been a basket of opportunities for the ones who were willing to take a peek at those risks. The first thing you need to ask yourself is, which investor are you? The Nifty share price is a good example of this; through the stocks on this index, you give yourself the chance to accumulate enormous wealth, in the long run, to attain financial goals just like several others who already have.
Here are some goals you can achieve with stock market investments
1. The HIgher Education Corpus Saving
We know how much college costs, and saving up for your children with a savings or RD account is not going to get you to make up to that corpus soon enough. Moreover, the inflation in the education industry is the highest in the country and to fund a top management institution is going to be a challenging job. In order for one to meet this spiraling cost and education and courses, it is equally important to invest in inflation-beating instruments like stocks. In a disciplined way, you can accumulate these expenses for the higher education of your children.
Let us just say you have 10 more years to apply for college. Then you can go ahead and invest in a stock for the long term and see the inflation results, which can reflect in your financial goal for the long term goal. The best place to invest in your child’s educational corpus would be in international stocks. Every year we see Indian students packing their bags abroad to get into university, and international investment can also play support to that, especially with the value of the dollar going up against the rupee.
2. The Retirement Plan
Retirement is the moment to reap the benefits of your years of hard work. However, it is only viable if you have a substantial enough buffer to cover your post-retirement requirements. To build a retirement fund substantial enough to see you through this era. Inflation is an important factor to consider while building a retirement fund since it depreciates the value of money over time. As a result, it is critical to invest in inflation-beating securities. Investing in the stock market might help you accumulate a sizable reserve of cash for retirement.
Regular dividends decrease or eliminate the need to sell shares to earn income, reducing or eliminating an investor’s reliance on the market’s volatile price fluctuations. So the best place to start your retirement investment would be with the market’s best dividend-paying stocks.
3. An Emergency Fund
Emergencies can occur at any time. Therefore it is good to be financially prepared for them. It is critical to have easily available money while dealing with an emergency. Investing in the stock market allows you to accomplish just that. This is due to the ease with which stocks may be liquidated. When you buy fundamentally good equities, you may sell them whenever you choose. However, keep in mind that the stocks you buy-in must come from firms with solid fundamentals. Only then will you be able to sell them when the time comes.
So be on the lookout for the most liquid funds in the market. They will allow you to access your cash within one business day and will be tax-efficient if you leave it invested for longer than three years.
4. Making up for those Short Term Financial Goals
Short-term objectives are those that you aim to achieve within the next 3-5 years, such as taking a vacation or purchasing a car. You may save for these ambitions by investing in the stock market. You can build cash for the aforementioned purposes by picking equities that have fared well over market cycles.
The stock market is full of different assets and products that you can invest in, and you know that. Take advantage of bonds and liquid funds that you can change into money in no time. Fixed income investments and funds would be one of the best-driven investments for your short-term goals, and it involves very low risk, keeping you on the safer side.
To the end, here are only some of the major financial goals one would save for today. But these aspects can expand, and your scope for investments in the share market can also expand with your goal. It does not just have to be education, retirement, or an emergency fund. You could also be saving up for a world tour for a change, which can be supplied for by the stock market, but just by the right set of stocks.