myfinopedia
What is Personal Financial Planning and Why is It Important (1)
The investments start from building emergency funds which are for expenses for unexpected emergencies such as sudden unemployment or an extended illness. These funds should be secure and liquid. The next comes the goals and time horizons-based investments such as college education, retirement income, etc. If between 2 to 10 years, use a combination of bonds and stocks. If the horizon exceeds 10 years, focus majorly on stocks, keeping in mind, investment objective and risk appetite. One should start saving for long-term goals by putting money in interest-earning products and letting those funds compound over time. The amount of risk one takes or avoid depends on how much time one has to let finances grow during the set time horizon.
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What is Personal Financial Planning and Why is It Important (1)
The investments start from building emergency funds which are for expenses for unexpected emergencies such as sudden unemployment or an extended illness. These funds should be secure and liquid. The next comes the goals and time horizons-based investments such as college education, retirement income, etc. If between 2 to 10 years, use a combination of bonds and stocks. If the horizon exceeds 10 years, focus majorly on stocks, keeping in mind, investment objective and risk appetite. One should start saving for long-term goals by putting money in interest-earning products and letting those funds compound over time. The amount of risk one takes or avoid depends on how much time one has to let finances grow during the set time horizon.
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