The sooner you begin thinking about wealth creation, the more money you will save before retirement. There are many options, including savings account with high interest rates and fixed deposits, and you can choose a combination of them based on your income and how much you can save.
Here are 5 tips that can help you get started.
1. Open a Good Savings Account
A savings bank account is the most basic requirement to begin your journey for wealth creation. It is a good idea to choose a savings account with high interest rates, to grow your money and build a fund for emergencies. You can choose an account that offers the maximum benefits, such as easy online opening with minimal documents for KYC, vouchers, free unlimited ATM withdrawals, signature debit cards, cashback, and more. You can use this account to receive your salary, transfer to all your investments and receive the returns.
2. Set Your Goals
Before you begin creating wealth, it is best to consider your financial goals and the timeframe. For instance, you may want to save enough money for children’s higher education, a foreign trip with your spouse or a fancy car. Even if your goal is to retire with enough money, you need to think about an amount. This makes it easier to decide how much money you need to invest now and which investments to choose. For instance, a fixed deposit may offer lower returns than mutual funds, but it offers guaranteed returns. So, you may want to invest some money in fixed deposits for the safety and some money in mutual funds for the possibility of higher returns.
3. Keep it Simple, But Diversify Your Investments
Avoid investing in too many assets as this makes it difficult for you to keep track. Choose a few options that will help meet your financial goals. Also, you can link all the investments to a single savings account, so that the interest rates and returns from all the investments accrue into one account.
On the other hand, it is also important to diversify your investments, so that you get the right balance between risk and reward. However, to keep it simple, you can consider investing in mutual funds, instead of buying a variety of stocks and bonds on your own. Keeping it simple will help you always be in touch with your investments without investing too much time in tracking them.
4. Maintain a Good Credit Score
There will be a time in your life when you will want an auto loan to buy your favourite car or a home loan to purchase your dream house. Before approving your loan, the lender will check your credit score. Having a good credit score also helps you benefit from better interest rates. You can build up your credit score in easy ways. For instance, if you have a good credit card, you can use it for online shopping or bill payment and ensure to pay off the dues within the stipulated time.
5. Keep Learning
Some basic financial knowledge goes a long way in creating wealth. This helps you make sound decisions. So, keep learning and checking out the pros and cons of new financial options available.
With some planning and research, it is possible to make your dreams come true. Start today by opening a savings bank account with high interest rate.