Tuesday, April 3, 2012
Five resolutions to follow this financial year to create wealth :
It’s the beginning of a new financial year; a year to look forward to with hope. To reach a goal, you need a path. Similarly, with the help of resolutions — financial resolutions, in this case — you can draw a road map and, with discipline, you can reach your goals. Let us adopt a few resolutions that are easy to follow and implement.
Save 10-30% of your net monthly income and invest for wealth creation. Pay yourself. A salaried person feels rich the moment his salary is credited; you pay your EMIs, splurge a little on food and outings and gadgets and, then, allocate some part of the balance for investments. Another trend is that you invest to save tax in the last quarter of the financial year. You should get out of such a practice, which doesn’t not allow you to plan for wealth creation.
Set aside 10-15% of your income for investments upfront. Only the balance 80-85% should available for meeting your other expenses. This way, there will be discipline and method in your investment planning and, also, expenses.
Make a budget for expenses. Not to plan is planning to fail. To make a budget is the easiest and, also, the most difficult task. It is difficult because you have to sit and plan and allocate a number to the expense and, then, actually follow the budget.
At the same time, it is easy because as you already know the type of expenses you incur, you have most of the data. Many of us shy away from making and implementing a personal budget, as we, typically, do not want to see the reality about the way we spend and how we lack the discipline to follow a budget. The initial 2-3 months will be a challenge. But, trust me, with a budget in hand, your financial life will become more interesting.
Cover risk adequately. Do ensure that you have an adequate insurance cover in terms of a term plan, which takes care of your life insurance. Another risk that we tend to ignore is health insurance. With spiraling healthcare costs, it is advisable to have a health cover over and above the one provided by your company, if any. As health is wealth, there should not be any compromise on this front. Also, when you invest, before checking the returns, check what is the risk — risk of capital erosion being the biggest of all.
Invest in investment products that you understand. Typically, you invest because the financial product is recommended by your banker or your colleague or your family members.
The tougher, but recommended route, which will pay off in the long run is: invest with a goal, with a time horizon, taking into account your risk profile and liquidity needs.
Each one of you is unique and your goals and needs are also unique. What is good for others need not be good for you. Understand the product and why it is suitable or unsuitable and, then, go ahead with the investment. Invest in simple and easy to understand products for meeting your financial goals.
Review expenses and investments periodically. Once a month, set aside 30 minutes to check your bank statements, investment portfolio and budget viz-a-viz actuals. It will not be surprising if you find out any unrecognised charges in your bank statement. Reviewing the budget viz-a-viz actual facts will ensure that you are disciplined to follow the budget and take action if you have deviated.
Investment reviews can happen once in a quarter and a comprehensive review every six months. This review should be carried out with your financial advisor.Check for any mid-course corrections. If you get the above basics in place, there will be order in your life and you will be in control over your investments, expenses and journey of wealth creation. Remember, Rome was not built in a day.
Source : financialexpress
8 MILLIONS CHILDREN ARE NOT IN SCHOOL : THE POWER OF YOUR WORDS CAN HELP CHANGE THEIR LIVES .. JOIN THE MOVEMENT NOW
A TO Z OF INCOME TAX PROVISIONS AT A GLANCE: 1. Detailed information of Income Tax is available on www.incometaxindia.gov.in 2. As per...
Relation is not a busines Where u gv only whn u get it But Its a beautiful feeling 4 some1 Where u like 2 gv evrything even if...
Here are some truths that your insurance broker, real estate agent, mutual fund adviser, bank manager and car salesman keep under wraps. ...
Gold has always fascinated us Indians but do you know how prices of gold have varied in India. I happen to visit RBI website which pub...
All of us want to live a healthy life, so we go to our doctors for regular check-ups. But do you regularly visit a Financial Doctor as...
ATTEND EXCLUSIVE SEMINAR ON WEALTH CRATION ON:12.06.10 VENUE: HOTEL AMBASADDOR RETREAT G T ROAD, ASANSOL TIME: 10.30-12.30 2.00-...
SENSEX-17009 Support-16930/16820/16700 Resistance-17180/17350/17480 NIFTY-5063 Support-5012/4982/4954 Resistance-5099/5132/5154
26/08/09 Sensex 15765(+77) Nifty 4678(+19) $ 48.80 Gold 15035 Silver 23474 CRUDE $ 73.97 ~ SAMPARK What u NEED.. When u NEED..@