Retirement planning is influenced by many factors like inflation, rising medical costs, interest rates, pension amounts, etc. In fact, retirement planning requires a proactive approach and one must begin it at an early age. The earlier one prepares for retirement, the better off he will remain in the future.
Now the question arises whether you can plan an early retirement if you correctly plan and make investments in shares. It is quite true that if you invest wisely, keep realistic targets and follow advice from a financial advisor, you can plan an early retirement and free yourself from all financial worries. It is understood that the stock market is inherently volatile and ups and downs are bound to occur. However, wise investments and the right decisions made at the right time can help you in the long run.
Having a fiscal discipline, starting early, and investing consistently is all it takes to create a corpus of funds that can help you at your retirement age. Direct equity investment is one of the best examples of active investments.
There are many people who invest a huge corpus of their funds in the stock market and reap its benefits in their retirement. For this, you need to have enough time and knowledge to understand the stock market and the way it functions. Generally, stocks are ideal for long-term investments and thus, you may keep on investing till you wish to and redeem the profits at any stage of your life. However, you must also keep in mind that returns are not guaranteed and are associated with risks.
Essentially, while planning your retirement through investing in equity, it should also be noted that one must have a diversified portfolio. This is because stocks from various industries give you several advantages and you must leverage each of them.
Thus, it is true that one must not refrain from investing in equities as it outperforms both inflation and fixed-income instruments over the long term.
There are a lot of options available to get success in building a corpus for your retirement. For e.g.- mutual funds, recurring deposits, Public Provident Fund (PPF), Employee Provident Fund (EPF), National Pension System (NPS), etc. However, amongst numerous investment vehicles, direct equity investment is truly considered as one of the most feasible options owing to its transparency and performance. Hence, it is true that one can plan an early retirement by investing in stocks of various companies as long as they manage their risk appetite actively.
At mastertrust, we believe that Goal-based investing is the science that you can use to plan your investments better and work towards your future goals faster. Explore Goal-Based Planning on our website at https://www.mastertrust.co.in/goal-planning.