While there are many reasons why a person might invest in unlisted shares the following are some of the common advantages of owning unlisted shares:
1. High-value investments: Since the shares are not very liquid, they are often either undervalued or overvalued for long periods.
Thus, if an investor can invest when the shares is undervalued, then he/she can gain significant returns on the investment.
2. Diversification of risk: Unlisted equity shares are a different asset class by themselves and as a result offer some diversification of risk for investors who are majorly invested in listed equity markets.
3. High growth investments: Often unlisted firms are smaller in size and are yet to reach a stage where they can go public to avail funds for their capital requirements.
As a result, investing when the company is small and invested through its growth when it lists on equity markets often yields high returns due to the small base effect.
4. Peace of mind: Unlike listed equity shares, the prices of unlisted equity shares are relatively stable and the investor need not worry about fluctuations in prices.
It’s a common question among investors who don’t have an investment manager: Why would I pay someone to manage my money? Can’t I do that myself with a cheap, online brokerage platform?
The answer of course is ‘yes, you can manage your own money on any number of brokerage sites.
However, as a professional financial planner and investment manager, I’ve noticed at least 3 reasons why you may want to consider hiring a professional to come alongside and help you with such an important responsibility.
And they may not be the reasons you think.
3 Reasons to Consider Hiring a Professional
First, your investment advisor will help you to continuously and quickly invest cash in your investment accounts.
One of the most common issues with do-it-yourself investing is thinking you can time the market with your cash. Over and over, I encounter clients who have been sitting on cash (to varying degrees) in retirement investment accounts.
Remember, you can’t even get at this money until you are 60 years old. Also remember, if you are 60 years old, you likely have a 30-40 year retirement on the horizon. Compound interest only works when you let it work.
That means keeping your cash invested continuously and quickly and a financial advisor will help you do this.
1. When do things always go according to plan?
Second, an investment advisor will help you stay accountable to the savings and investing goals you set for yourself.
When you are going it alone, it’s easy to make excuses, blow past personal finance deadlines, and feel like you are doing alright when you have one too many blind spots. A great financial advisor will help you stick to your investment plan.
But when things don’t go according to plan, your advisor will help you course-correct and make appropriate changes.
And let’s be honest, when do things always go according to plan? Helping you make adjustments and not simply ignore important financial decisions is what your advisor is there to help walk you through.
2. Making progress, moving forward
Next, your advisor should make you a person of action! With financial decisions, it’s far too easy to push a final decision to the background.
Even once you’ve made a final decision, executing that decision can take weeks, or, more likely, months.
Your advisor not only helps you make the decisions but helps you execute the decision promptly.
Whether you need to re-balance your portfolio, make an allocation change, or review your fund expenses, your advisor helps the action happen.
Put simply, your advisor helps keep you moving forward!
3. Do you have a thinking partner?
Third, your advisor should be your thinking partner when it comes to adding or deleting investments from your portfolio.
Every investor faces decisions from time to time on whether to change a certain investment fund in their portfolio.
How do you know when is the right time to make a change? What is your decision framework for making big investment changes? What is the tax impact of the decision? For most investors, the framework is largely emotional.
Your advisor should be your thinking partner when it comes to investment changes.
A fiduciary financial advisor will be able to help put investment decisions into proper context and bring the decision back to you and your financial plan rather than your emotional opinion of the investment.
By now, you should have a good idea of what you value in life, and what kind of lifestyle you want to lead.
This means that it’s time to stop spending on stuff that isn’t important to you. Do you know how much crap I bought in my 20’s that was a complete waste of money? Too much.
Sit down, think about what you want to accomplish with your money, and then create a list of spending priorities that work for you. Then, spend according to those priorities.
Your spending will be more in line with your values, and you’ll be happier as a result.
If you have a spouse, this involves them, too. My wife and I are constantly talking about what are the important things we want to spend our money on.
In our 30’s the constant topics revolved around upgrades to our home, travel, investing in our businesses, and our kids – three growing boys add up!
2. Buy Health Insurance
Now that you’re getting older, you need to think about health insurance. Even if you live a healthy lifestyle, there are reasons to have health insurance.
If you have kids, you need health insurance. If you can afford a high deductible plan, it can make sense (if you have relatively few health care needs and costs) to purchase one.
You can then put money into a Health Savings Account, earning you a tax deduction and allowing the money to grow tax-free as long as you use it for qualified expenses.
3. Create a Retirement Plan
Many people in their 30s have yet to perform a retirement calculation. Now is the time for you to perform that calculation.
Use one of the many online calculators to figure out what you need in retirement, and what you need to do now to meet your goals later.
Get serious about what you want to do in retirement and make a plan.
4. Diversify Your Income
Now that you’re in your 30s and things have settled down a bit, it’s a good time to consider income diversity.
Don’t rely on your day job for your entire financial well-being. That’s just asking for trouble.
I’ve been able to diversify my income by starting this blog and other online ventures to complement my revenue from my financial planning practice.
Try to cultivate income diversity with side gigs, investments, and other endeavors. That way, your entire family’s financial future isn’t at risk if you’re fired from your job.
5. Get Financial Planning Help
As your finances become more complex, there is a good chance that you will need help working through the ins and outs.
Whether you need help with tax planning (I love my accountant), plotting a retirement course, or figuring out what insurance policy is best for you, consider working with a financial planner that has no conflicts of interest.
Unfortunately, most people assume financial planning services are reserved for individuals with very high net-worths. For a long time, that has been the case.
But, a relatively new company that is bridging the gap between this very helpful financial service and the younger generation (who typically don’t have millions of dollars of assets) is Facet Wealth.
Engine protection car is one of the most important add-ons covers that are offered by motor insurance companies in India.
Pays for the Most Expensive Car Part
The engine is considered the most expensive part of a car. Naturally, the cost of replacing the engine or any of its parts can cost a lot of money.
Besides, repairing the car’s engine is also quite expensive. But with an engine protection cover, you don’t have to worry about how much money will it cost to get your car’s engine repaired or replaced.
Ideal for People Living in Flood-Prone Areas
People who reside in low-lying areas prone to floods or water-logging often find their car’s engine damaged due to water ingression.
The engine protection cover will ensure that the cost of repairing your four-wheeler’s engine will be covered by your insurer every time water enters inside the engine.
Comes to the Aid of New Cars
If you have recently purchased a new car, any unfortunate damages to the vehicle’s engine can burn a big hole in your pocket as the engine parts of a new car will be expensive. But if you have purchased an engine protection cover with your motor insurance policy, the cost of your car’s engine parts will be covered no matter how expensive it may be.
Things to Keep in Mind When Buying Engine Protection Cover
The engine protection cover comes with certain terms and conditions that apply to car owners who buy this add-on cover.
Take a look at the things that you must keep in mind if you are considering buying the engine protection cover:
1. The engine protection add-on cover is not available for cars that are older than five years.
2. This cover can only be purchased by people with comprehensive or own-damage car insurance policies. This is because engine protection cover is not available under third-party liability car insurance.
3. Since it is an add-on cover, a car owner needs to purchase the engine protection cover by paying an additional insurance premium at the time of purchasing the best car insurance.
4. Most motor insurance companies allow car owners to make up to two claims under their engine protection cover.
Before turning 30, you should make certain financial decisions as early as possible for a stress-free future where financial contingencies are a far cry.
So what are those decisions? Here’s a list of 4 basic decisions that are almost universally applicable, so let’s take a look.
1. Ensure Yourself – There is no specific age for taking out an insurance policy and the earlier you start the better.
By the age of 30, you are probably one of the contributors to the family income if you are in the joint family system or the main breadwinner in your nuclear family.
Even though your spouse earns, there will be financial loss in case of any unfortunate event. Insuring is always the best answer for income protection and buying a term plan with considerable coverage is also affordable.
2. Plan for Retirement – Retirement is the last thing you think of when you just hit the 30-year age mark. The whole life ahead seems too short to accomplish all you desire and the thought of retirement leaves a sour taste in the mouth.
But planning early is the key to a comfortable retired life. Post 40 when the majority of people plan for their retirement, the accumulated corpus falls short because of other liabilities.
So open a PPF Account and start saving a little amount every month. Let compounding do its magic and you won’t have to worry about your retirement corpus.
3. Health is Wealth – Moving on from life insurance, can health insurance be left far behind? In the year 2012, the insurance sector reported a surge in insurance claims to 47% as compared to 15.8% in 2004 and that too in the age group of 26-35 years.
Yes, though you are turning 30, the modern lifestyle has given rise to newer diseases that do not consider age while attacking the individual. So don’t be foolish and invest in a health plan probably a family floater one to cover the entire family.
If affordability is a factor, you can start low and then add a top-up plan with your base plan for complete protection.
4) Buy a SIP (Systematic Investment Plan) – Mutual funds have become attractive with the diversification they provide and with a positive trend observed in the stock market, investing in a SIP of any good performing mutual fund house is the next best decision you should make.
Starting early gives the benefit of compounding returns where the money grows exponentially over the years.
So when you need funds for your child’s future or for buying a house or for that much-awaited Europe trip, you won’t have to look anywhere else.
Investing in multiple SIPs is ideal taking into account the quantum of savings.
An average investor uses his money and invests the rest; a good investor invests his money and uses the rest. Investing is a risk vs. returns game.
While some have made millions, many have lost as well. Learn the key characteristics of a good investor to become one.
Goal setting
A good investor will always have a clear goal. It is very important to have a plan to achieve the goals. Variations most likely tend to divert an investor from the agenda.
Having a plan of action within a defined period for a particular return on investment is a sign of a good investor.
They are prepared for the uncertainty of the market while the plans are usually made considering both the sides
Patience
Over some time a good investor creates wealth due to his patience. It is probably the finest quality to have. A good investor has faith in his plans.
They usually do not feel bad about the 10% downtick; they would rather sit tight to celebrate the 100% uptick.
They are persistent about sticking to the plans. They usually do not get into the buy and sell trends.
Knowledge
Besides utilizing time to the best, a good investor possesses knowledge of the market. He/she understands the position of funds and has researched the company’s investment strategy and philosophy.
You need to know where your money is being utilized. A good investor analyses the growth pattern of the company over the years from genuine sources.
On the accounts of the anticipations and knowledge, a good investor will have a defined plan for exit point as well.
An active learner who is open to making the right choice based on the genuinity of knowledge is a good investor.
Right Decision A good investor knows the time. They keep an eye on the current scenario in the market. They update their knowledge about market activities and growth.
Having a sound understanding of trends enables the investors to overlook their plans and decide the term of the investment.
Having an understanding of current trends and company market position makes one a good investor. They own their mistakes and learn not to make them again.
The good investor doesn’t need to jump into the trends; he/she just does what is right.
