Financial planing - Life cycle series - 1
Financial planing for : Young unmarried without responsibilities.
It is a starting point of career and may exist still you feel established. Most of the times it happens that as there is no responsibility the major portion of income goes as an expenses. There is a fascination about Gadgets, towards costlier life style.
As there is no any responsibility no body feels a need for savings. Parents are also not giving any guidance about the savings or making them responsible about taking right kind of decision of career and financial management.
Majority of people whom I met who falls in this category are full of confusion about their future career and financial well being. Actually this is this is the stage in life where you can really build solid foundation of financial future.
Following are the things which are important in this stage :
1. Take care of your self : You have to take Medical insurance and Accidental & disability insurance. which will protect your from possible loss in wealth in emergency as well as protect your financial well being in unfortunate events. life insurance is not needed as there is no financial responsibility.
2. Build cash reserves : You have to have at least 6 months expenses in your cash reserves as the job is not secure now a days.
3. Plan for long term goals : The biggest strength which you have is time is on your side if you plan your investments in right way then you can be wealthy. Here you have little money to invest but as time is there the compounding effect will help you.
4.One more thing you have to keep care that your investment should grow at the rate of salary growth.
If you are at 21 and started investing for your retirement at age 55. and starting with Rs. 5000/- per month in an investment which gives you 12% returns and if your salary rise is 8% then you will accumulate aprox.Rs. 5.52 Cr. , if the rate of interest is 13% you will make 6.62 Cr.
It is important for all you have to build assets first and take care that you take appreciating assets not depreciating one.
Any views ???
About the author : Ashish Ramesh Bhave is a CERTIFIED FINANCIAL PLANNER, focused and specialized in financial planing for individuals and families.
Financial planing for : Young unmarried without responsibilities.
It is a starting point of career and may exist still you feel established. Most of the times it happens that as there is no responsibility the major portion of income goes as an expenses. There is a fascination about Gadgets, towards costlier life style.
As there is no any responsibility no body feels a need for savings. Parents are also not giving any guidance about the savings or making them responsible about taking right kind of decision of career and financial management.
Majority of people whom I met who falls in this category are full of confusion about their future career and financial well being. Actually this is this is the stage in life where you can really build solid foundation of financial future.
Following are the things which are important in this stage :
1. Take care of your self : You have to take Medical insurance and Accidental & disability insurance. which will protect your from possible loss in wealth in emergency as well as protect your financial well being in unfortunate events. life insurance is not needed as there is no financial responsibility.
2. Build cash reserves : You have to have at least 6 months expenses in your cash reserves as the job is not secure now a days.
3. Plan for long term goals : The biggest strength which you have is time is on your side if you plan your investments in right way then you can be wealthy. Here you have little money to invest but as time is there the compounding effect will help you.
4.One more thing you have to keep care that your investment should grow at the rate of salary growth.
If you are at 21 and started investing for your retirement at age 55. and starting with Rs. 5000/- per month in an investment which gives you 12% returns and if your salary rise is 8% then you will accumulate aprox.Rs. 5.52 Cr. , if the rate of interest is 13% you will make 6.62 Cr.
It is important for all you have to build assets first and take care that you take appreciating assets not depreciating one.
Any views ???
About the author : Ashish Ramesh Bhave is a CERTIFIED FINANCIAL PLANNER, focused and specialized in financial planing for individuals and families.
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