Smart Investment Planning for FY 22-23


By Vikas Singhania, CEO, TradeSmart

The beginning of the new financial year is when most companies and businesses start looking at the year ahead and plan for the same.

If you have missed making financial resolutions at the beginning of the year, the start of this Financial Year is another chance to etch a plan and get your investments for the year sorted.

This is how you can get started:

Make a Budget

Discipline is the cornerstone of any successful investment journey. An important part of this is making a budget. Your financial success rests on having a budget in place.

A budget will help you understand your inflows and outflows enabling you to plug any leaks in terms of unwanted or avoidable expenses. This will create a surplus which can then be put to better use by making investments that will yield returns for the future.

Make sure Income – Savings = Expenses

Plan for inflows

The start of the new financial year is also the time when employees receive a bonus. It is important to plan the optimal use of this inflow.

The first priority should be to retire unwanted or bad debt. Good debts are those that help build as asset like home or education. Bad debt is built by spending on things that can be discretionary. Pay them off first.

The surplus left can be invested as a lump sum or over a period of time. Based on your risk appetite equity mutual funds or equities are a good option.

Tax implications

Tax planning is also very important. Usually, tax planning is left as a last-minute exercise where investments are rushed just to save tax.

If planned in advance, it can not only help reduce taxes but also help in securing a better financial future. Equity Linked Saving Schemes (ELSS) of mutual funds have the dual benefit of participation in equity returns but also help save tax.

Another option worth considering is National Pension Scheme (NPS) which can also help build a retirement corpus. An added benefit is that a deduction of INR 50,000 is available over and above the deduction of INR 1.50 lakh under Section 80C.

Make sure you sit with your financial planner and build an optimal tax portfolio.

Ensure adequate protection

With changing financials and other factors like family responsibilities it is a good time to evaluate if you have adequate insurance to protect your family.

A term life cover is a must to ensure that your family’s future is taken care of. There are various ways to ascertain adequate insurance. Most insurance companies have calculators that help know how much insurance you should have. But a simple rule of thumb rule suggests that you should have insurance of at least 10 to 15 times your annual income.

Don’t miss out on health insurance. The rising cost of medical treatment makes it imperative that you and your family are covered by medical insurance. Look at a family floater of at least INR 10 lakh.

Plan your goals

Make sure you are reviewing and evaluating your financial goals. These could be better education for your children, a vacation, buying a house, and even securing your retirement.

Your goals should be SMART – Specific, Measurable, Achievable, Realistic, and Timely.

Let’s assume your goal is to buy a house

  • Specific – I want to buy a house.
  • Measurable – I will need X amount of money
  • Achievable – Do I have the resources to achieve this goal.
  • Realistic – Buying a 5 BHK may not be realistic but a 2 BHK can be.
  • Timely – It cannot be open-ended, one needs to have a specific time period to work on for example 3 years.

Bottom Line

Congratulate yourself for deciding to take that first step and smartly planning your investments.

If you don’t already have an account through which you can make investments open one today. Make sure you continuously monitor your investments and are disciplined to reap their benefits in the long run.


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