Tag: financial goals

Categories
Marketing

4 Mistakes To Avoid While Investing In Stock Market

4 Mistakes To Avoid While Investing In Stock Market
4 Mistakes To Avoid While Investing In Stock Market

Summary: While investing in stocks it is easy to get carried away by numbers and record highs. Don`t make these mistakes in the stock market especially when it’s too tempting.

Investing in a stock market is a serious affair and a long-term game. Despite this, many investors in India tend to succumb to their emotions every time the market hits a new high. There have been many firsts for the Stock Exchange. When it hit 1,000 for the first time, it was an all-time high! And then it reached 10,000, 20,000, 40,000, or 50,000…and with every new record, the story continued.

There will be a time when the Sensex will cross the 100,000 mark and then 500,000, but we don`t know when that will happen. No matter how many records the market is breaking, the basic rules of investing don`t change. If there is one important thing that you should remember while investing in the market, it is that market high is not a destination; it is a journey towards wealth creation.

To ensure that this journey is smooth and produces desired results, you can listen to a business motivational speaker who has a good experience in financial investment.

Here are some golden tips that you should consider before investing in the stock market while it rides the bull:

1. Avoid Fear Of Missing Out

Many people suffer from FOMO or fear of missing out when they could not participate in the stock market rally. Recently, the same happened in India and now there is a strong urge to invest before they lose more. But fear of missing out on some perceived gains should not be the guiding principle when it comes to investment. It is best to avoid FOMO because it will lead to many irrational money decisions that will result in losses.

2. The Market is Smarter

A market is a forward-looking machine. It means that the market always sees things we cannot. It has discounted the third or even the fourth wave of the pandemic. However, there is a huge difference between the market’s performance and a nation’s economy.

The Sensex has its own rules, which is why the market keeps proving everyone wrong. This is why investors should not overthink. Focus on diversifying your portfolio, asset allocation, and risk profile. Control the controllable before it goes out of control, i.e., your behaviour, your money, and hence your losses. To know everything about Share Market from the scratch, watch here:

3. Don`t Invest in Meme Stocks or Trending Stocks

You must have heard about various stocks and their sky-rocket prices without any strong fundamentals in place. It is a pure play of operators and the community. Similarly, many people invest in penny stocks and meme stocks in India based on the news for a quick gain. However, always know the fact that whenever a stock is trending, it is trending for the wrong reasons.

It is important to remember that you are investing in businesses and not in stocks. Find good businesses, and avoid investing in memes and penny stocks. Understand your risk profile, and financial goals, and do thorough research before you pick any stock, the way you do it before buying a car or a house.

4. Don`t Follow Anyone Blindly

Be it Rakesh Jhunjhunwala or Warren Buffett, never follow anyone blindly. These legendary investors are experts in the stock market and there is nothing wrong with their investing advice, but the issue lies in following any advice blindly. If you follow Warren Buffett, you must be aware of his famous quote on diversification. He says, “Diversification is for the ignorant.” It simply means that those who know how to pick the right stock at the right time should only invest in a few stocks instead of spending on multiple stocks across multiple sectors. But this does not always work for a retail investor.

When you invest only in a few stocks, you put yourself at a huge risk of having a concentrated portfolio. So always have a diversified portfolio, unless you have the money, time, and expertise to select stocks like Warren Buffett.

Never invest in one go, especially when the market is showcasing high fluctuation. So unless there is a good correction, always spread your investments into tranches. For example, if you have Rs. 5 lakh to invest, then divide that into five or six months and invest accordingly.

The idea of managing a business is easier said than done and we completely agree with you. This is why to help you move forward with your business goals, we at Bada Business offer an exclusive Business Coaching Program that comes with Foundation courses, specialized courses, and value-added courses.

To know more about our courses, visit: www.badabusiness.com

Categories
Startup

Launch Your Startup With These 5 Financial Tips From The Experts

Launch Your Startup With These 5 Financial Tips From The Experts
Launch Your Startup With These 5 Financial Tips From The Experts

According to a report published on Inc42.com in 2016, the primary reason behind many startup shutdowns was due to lack of funding. In 2017 lack of market demand was the primary reason for the startup shutdowns.

Starting your business venture can be a daunting but rewarding process. While a great business plan is imperative for entrepreneurs, financing is one of the most crucial elements that help a startup succeed. Many entrepreneurs often take help from a business coach to receive fundraising guidance.

Securing funding to launch a startup can be difficult. More often than not, entrepreneurs use their savings to start their businesses. Another report by NASSCOM states that around 25% of Indian startups shut down untimely due to failure to raise follow-on funding rounds beyond Pre-Series. A good and effective management of finances can make a massive difference between a business that keeps climbing the ladder of success and one that falls at the very first challenge.

Here are five financial tips that would help every entrepreneur or small business owner manage their finances better:

1. Create a Dedicated Emergency Fund

A contingency or an emergency fund to provide financial security in desperate times. This fund helps an organization meet significant expenses in unforeseen circumstances. Ideally, one should have six months of living expenses as a contingency fund.

If you own a business, it is suggested to create a larger emergency fund if your company has seasonal cash-flow fluctuations. It is best to build such a fund and invest it in a mutual debt fund as it will give far better returns than a savings account and help you encounter unforeseen challenges.

Having an emergency fund will also give you peace of mind, and you can make more confident decisions for your business. A good business mentor will help you how to create a dedicated emergency fund.

2. Avoid Expensive Credit Loans

Credit is the lifeblood of any business, especially for startups. Hence, entrepreneurs need to keep their credit scores high. Always pay your bills on time. When it comes to financing your business, the cost of credit is a critical factor, especially in the initial months of operation.

In the beginning, when the business has not even reached the break-even point, the company’s financing should be done by keeping the interest cost at the bare minimum. This will reduce cost and attain profitability. Never miss a payment or delay the payment date, even if you face a financial crunch.

Also, keep your credit utilization ratio under consideration. The credit utilization ratio is the percentage of your available credit limits that you borrow during the month. Keeping your credit utilization ratio below 30% will help you maintain a better credit score.

3. Keep personal & business accounts separate

It is wise to keep your business and personal bank account separately. It will provide the benefit of easier accounting at the end of the financial year for tax purposes and eliminate the cash crunch situations in business caused due to withdrawals for personal expenditure.

4. Bad Debts

Debts that cannot be recovered are called bad debts. When credit sales are not recovered, bad debts are created. Entrepreneurs should eliminate the situation of a fund crunch in business due to withdrawals for personal expenditure. Instead, these debts should be repaid in the next year so that a healthy financial position of the company can be showcased in front of potential stakeholders. You can also take guidance from a best business coach to plan your finances.

5. Develop Financial Goals

Keeping the in-flow and out-flow of your finances is extremely important. Planning a year for significant expenses in advance can help small business owners to reduce the financial burden. If your future business goals involve expanding and launching new products or services in the market, it is essential to plan everything related to finances.

If you are not sure how to manage your finances or ensure a solid financial future, you can also take the help of a certified financial planner. A financial advisor can also help you build a strategy to meet your business objectives.

Instead of investing all your profits back into your startup venture, save for your future by investing your funds into multiple investment schemes. A wide array of investment schemes is available, from stocks to mutual funds. You do not have to invest every last penny into your business; save for your future.

If you can improve your finances with a better emergency fund, a solid credit score, and a robust retirement savings portfolio aside from the equity you own in your business, you can run your startup with a more focused and peaceful mind.

And for business owners, who are some of the busiest people in this world, having financial security is genuinely priceless. Are you planning to launch your dream startup business but worried about managing your finances?

Do you have any other financial tips for our entrepreneurs? Please share them with us in the comment section below.

The idea of managing a business is more straightforward said than done, and we agree with you. This is why to help you move forward with your business goals, we at Bada Business offer an exclusive Business Coaching Program that comes with Foundation courses, specialized courses, and value-added courses.

To know more, visit www.badabusiness.com.

Categories
Finance

5 Key Factors Beginners Must Consider Before Choosing A Mutual Fund

5 Key Factors Beginners Must Consider Before Choosing A Mutual Fund
5 Key Factors Beginners Must Consider Before Choosing A Mutual Fund

Whether you are a novice, an experienced investor, or a trader, mutual funds are among the most popular investment options. All one needs to know is the basics and zeal to build their knowledge base to make smart, informed choices.

But what exactly are mutual funds?

A mutual fund is an investment scheme made up of a pool of money collected from many investors to invest in various securities. The fund manager then uses these funds by investing them to purchase various securities including gold, stocks, bonds, etc. Each mutual fund will have a certain objective and different returns.

So, when is the best time to invest in mutual funds- when the market is up or down?

It is both. Many people often get confused about the best time of investing in mutual funds. But investing in mutual funds needs in-depth analysis, discipline, and practice. Irrespective of the market fluctuation, these funds tend to provide decent growth over some time.

However, before you decide to invest in mutual funds, you need to be aware of a few things that will ensure you get better results and a rewarding experience.

Here are 5 things you must know before investing in Mutual Funds:

1. Mutual Funds have Different Risk Levels

Every mutual fund category is different and hence, they possess a different level of risk. However, there is no common platform based on which you can determine if a particular mutual fund category has a high risk or low risk.

For instance, direct equity has a higher risk when compared to equity mutual funds. However, it offers higher returns than other funds. So, the risk associated with every mutual fund category is different. Hence, before investing in any Mutual Fund, you should check how many risk factors it contains because every scheme has a risk assigned to it, and how much you are willing to take.

2. Find Your Objective

Before you decide to invest in mutual funds, you must know your objective. For instance, you can invest in equity funds, if you have long-term financial goals, but if you have short-term or medium-term financial goals, you can invest in debt funds.

So, before choosing a mutual fund, the first step is to decide the goal. The time frame you are looking for, and the returns that you are expecting will help you choose a fund that is best suited to your objective.

3. Check the Expense Ratio

For the proper management of your funds, a commission is charged which is known as the expense ratio. As an investor, you need to figure out how much expense ratio a particular fund is charging, as it is calculated across the investor`s total portfolio and will have a significant impact. Hence, always pick a mutual fund that comes with a lower expense ratio. The higher the AUM, the lower the expense ratio.

4. Consider the Taxes Your Investment Attracts

How much income from a fund will be taxable is something every beginner must consider. The returns from equity mutual funds are taxed based upon the holding period and the applicable tax rate. Mutual funds are often efficient in terms of post-tax returns. For instance, long-term capital gains are taxed at 10% over and above the exemption limit of INR 1 lakh while short-term capital gains are taxed at a rate of 15%.

5. Don`t forget to check the Track Record of the Mutual Fund

From checking the investment time to AUM, it is crucial to check the track record of a particular Mutual Fund scheme before investing. As an investor, you should opt for a mutual fund house with a larger AUM. i.e. Assets Under Management.  It not only withstands the sudden redemption pressure from major investors but also offers a lower expense ratio.

Also, check the investment style of the fund manager before putting money in a mutual fund. Opt for a mutual fund where the fund manager shows consistency irrespective of the market cycle.

Mutual funds are subject to market risk, which is why doing a fundamental analysis of a particular investment scheme becomes paramount. But, do know that no matter how good a fund performed in the past, it won`t guarantee that the mutual fund would do well in the future.

Want to start your own business but don`t know what to do? Become an IBC (Independent Business Consultant) and earn up to Rs 1 to 10 lakhs per month. What more? Get an opportunity to be recognized in Dr. Vivek Bindra`s world record creating mass digital webinars & Youtube Videos. Click here for more details: https://www.badabusiness.com/ibc

Categories
Finance Strategy

5 Common Mistakes Beginners Make While Investing In Stocks

5 Common Mistakes Beginners Make While Investing In Stocks
5 Common Mistakes Beginners Make While Investing In Stocks

Summary: The stock market offers ample opportunities for wealth creation. But is it easy for beginners? Find out 5 common mistakes that first-timers should avoid while picking stocks.

Invest in the stock market—-this was the millionth time Rahul heard this suggestion from his friend Sridhar when he asked about wealth creation. Trading, mutual funds, long day, short day, intra-day, and many other terms were thrown at him by Sridhar that amazed Rahul.

Rahul asked Sridhar how to invest in stocks and his dear friend asked him to open a Demat account. And as eager as he was Rahul begins his trading journey by investing in cheaper stocks without doing fundamental analysis.

Result? He lost INR 5000 in 2 days. Though Sridhar showed a great way to wealth creation, he should have told Rahul to avoid making hasty decisions. Investing in the stock market can be tricky, especially for amateurs. And for a new investor, it can be an alluring place.

For those who are new to this world, it might seem like gambling where people make and lose fortunes. But with the right approach and fundamental analysis of stocks, one can create wealth. The investment process has become hassle-free these days.

However, even with the fundamental knowledge of stocks, you can make these 5 mistakes as a first-time investor:

1. Not Understanding the Fundamentals of Stock Market

Ignoring the basic facts about the stock market can result in you losing your hard-earned money. Understanding concepts like ‘Going Long’, Going Short’, ask price, bid price, bid quantity, offer quantity, and stock price changes, PE ratio, PB ratio, dividend yield, a margin of safety, and many other factors.

To know everything about Share Market from the scratch, watch here:

2. To Not Have a Proper Investment Plan

Before you start investing, as a new investor you must have a proper investment plan. Being an amateur every stock and share will look promising. This can often make you lose direction by unplanned investments. Hence, it is very essential to understand your objectives and your financial goals. The investment objective is not subjective and every investor has their own financial goals.

3. Unaware About Risk Factors

The Share market is full of risks. So another mistake that first-time investors often make is that they do not decide how much they are willing to take risks. Investors who have a low-risk appetite may consider investing in stocks that have a low-risk appetite that provides stable returns and is less impacted by market volatility.

4. Wrong Risk Assessment

The stock market is exposed to high market volatility. So while trading online for the first time, it is best to strike a balance between unnecessary risk-taking and calculative risks. Sometimes beginners fail to know the margins they are willing to push while taking risks. Hence, understanding your risk-taking ability is of paramount importance.

5. Not Making a Diverse Portfolio

Many investors who trade online often fail to diversify their investments. They often fail to understand that investing in a single company or investing in only a single type of investment is never a profitable idea. A market crash or a single negative market movement can result in huge financial losses.

An ideal portfolio must comprise of stocks from different companies, along with investment in futures and derivatives.

Talking about money and growing it by investing in multiple stocks and companies may seem daunting at first. But with in-depth research and fundamental analysis of each stock before purchasing can give high returns.

So whether you are a beginner who has set goals and wants to invest in stocks to fulfill them or a professional who is aware of all the ups and downs of the market, if you don`t do enough research, you will end up raking in losses. The above-mentioned mistakes are probably common because often people ignore the basics. Keep these factors in your mind and be a smart investor.

If you have a startup business and looking for solutions, worry not! The idea of managing a business is easier said than done and we completely agree with you. This is why to help you move forward with your business goals, we at Bada Business offer an exclusive Business Coaching Program that comes with Foundation courses, specialized courses, and value-added courses.

Categories
Strategy

5 Smart Ways To Earn Extra Income With A Full-Time Job!

5 Smart Ways To Earn Extra Income With A Full-Time Job!
5 Smart Ways To Earn Extra Income With A Full-Time Job!

Is your bank account dwindling? Are your savings not enough to start your dream startup? Do you want to pursue your master’s in the best foreign university? Do you simply want to earn extra income with your full-time job?

If the above questions resonate with your current situation and the answer is yes, then let us tell you that you are not alone! Everyone in this world would like to have some extra income because let`s face the fact- our salary is just not enough to fulfill our dreams.

While some of us would want to take admission to a world-class foreign university, some would like to pursue the online business course, others might be saving to turn their startup business idea into a reality. But with lots of fixed expenses, it becomes difficult to save much with a regular 9 to 5 job. And, when you have lots of things on your list to achieve, you run out of time.

But the good news is that you can eliminate some of your financial stress by earning extra income with your Full-Time Job.

Yes, you heard it right!

So whether you are looking to stock up cash for your startup business idea or make new investments, a few thousand rupees can certainly bring a nice change into your life. If you are wondering how to do it, let`s get started:

1. Start a Service Business

A service business can be launched without a large network, courtesy of the internet and social media. To start a service business you do not need many overhead expenses. You can simply start your business by telling people in your social circle about the services you are offering and how will it make their lives easy and better. Ask them to spread the word and who knows, you might end up founding a successful startup business.

There are many services like dinner catering, event planning, freelance writing, digital marketing, social media brand promotion, or online marketing. Start by crafting an amazing outreach email to get yourself up and running in a couple of days. You can also take help from a business coach to guide you.

2. Invest in Real Estate

Many full-time working people do not like the idea of becoming a landlord, especially in India for various reasons. But being cash-strapped is the major one. However, you can invest in a cheaper property and rent it out. From the monthly rent that you will receive, you can pay out your EMIs or save up the money. It can also be a lucrative way to earn passive income during your retirement years.

3. Start an E-store

If you have a dream of starting your business store or a fashion outlet, you will have to think about doing a lot of research for products, manufacturers, market your site and figure out how to fulfill orders. Along with all that you will also have to take care of customer service and refund requests.

But managing all that can be a little daunting with a full-time job. Hence, the right way to do it is to start a store and develop a presence directly on Amazon or Flipkart without the need to take on so many roles. Many sellers directly ship their products to their fulfillment center and never touch the product itself.

4. Become a Motivational Coach

If you have an amazing way to connect with people and leave an impact that can make their lives better, you can become a motivational coach too. You can make thousands of rupees by hosting events without aiming for sign-ups and high-profile guest speakers.

These days more than physical challenges, people are suffering from mental challenges. Most often they feel discouraged and demotivated. A motivational coach shows the right path to his audience by sharing his life-changing experiences that include both struggles and success. Once you secure a loyal audience, you can start charging for an event and grow your network by using various social media platforms.

5. Get paid for your Hobby

Dig a little deeper and you will find out that we all have quite a few hobbies that we can use to earn extra income. For instance one of my friends loves painting glass bottles. Now she has started selling it through her Instagram profile along with her full-time job.

Take inventory of what you love doing in your free time. If you love trekking, you can do a professional course and go out in the mountains on weekends with a group to earn that extra money.

These ideas can help you earn extra money while you have a full-time job. If you want to start a startup, you can take our ‘Entrepreneurship course’. This course is an online business course that prepares you to face the challenges of the business world. It also helps you to build a startup from the scratch.