Financial Tips for 2019

1. Start savings regularly and the sooner the better (preferably as soon as you get your first job). Try to save at least 20% of whatever you earn.

2. Avoid buying property on a mortgage as it takes a lot of your income unless you have a planned strategy to clear off the loan. Cash Flow is very Important. Though, the house will be your asset on the balance sheet, your liabilities and commitments would also increase.

3. Unexpected situations can hurt all your plans; ensure you are in a position to handle these risks by doing regular financial reviews.

4. Car Purchase can be avoided unless its for daily use.

5. Ensure you are saving money into a ANNUITY which provides you with Income as soon as you retire; Income in retirement is an Asset; Assets in retirement can become a Liability.

6. Deduct your savings from your income before you spend any of it. Do not take on loans and liabilities unless that is your only way out of a situation. Unnecessary loans dent your cash flow and affect your peace of mind in ways you cannot even imagine sometimes.

7. Marriages are made in Heaven; but the cost of the ride can dent your pocket. Weddings can be more beautiful on your pocket and warmer if kept simple; consider when you spend this money. It can dent your pocket very deep.

8. Inflation is real; if money is kept Idle; you are losing money everyday; beware of how much money you keep in a current or checking account. If it is excessive; you are losing more and more to inflation: a HIDDEN RISK to many families and individuals.

9. If you invest in the stock market, watch it with caution and be ready to take action.

10. Do not have a belief that showing off with a huge property and expensive car make you (look) rich. It's what you save and invest, that is more important in the long run.

11. Where there is a will; there are relatives; therefore ensure you have a clear "letter of wishes" to protect the people you truly care about and avoid them the hardship which follows your demise.

12. Never invest in LIFE insurance looking from the perspective of getting market returns. LIFE Insurance is not an investment; it is a risk management tool to protect future income.

13. Your knowledge and your skill set should be your first investment; after that you can invest into other physical assets.

14. Your future plan should be very clear especially in the areas of your career, your life goals, your expenses and your investment strategy.

15. Build an emergency fund which covers approximately 6 months of your expenses.

16. Health is Wealth; Ensure you keep a close eye on both these words; loss of either one can be very dangerous. Do regular check ups on both these words; HEALTH & WEALTH.

17. Death and Illness cannot be predicted!!.... therefore buy adequate income protection insurance due to illness and death.

18. Old age is REAL; do not overestimate your working capacity; you will need some form of "Guaranteed Income" when you are in retirement. AGE HAS A FUNNY WAY OF TAKING TOLL ON YOUR ABILITY TO WORK!!

How to Manage Money

In today's times, Most of the times financial crisis occurs in our life not because of lack of enough income but, not following proper financial Planning.

It doesn't matter if your monthly income is 5000 PM or 100000 PM, You must have some plan to manage your money.

Priority 1:

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Before going for any investment/Savings, You must fulfill these goals, May be most of these are one time spendings/expenses and most of the people tend to avoid these goals. But remember this is your first priority in your financial Planning.

 i. Health Insurance: 

     Whatever the age, You must take the health insurance for yourself and for your dependents.

ii. Life Insurance:

     Remember, Life insurance means pure term Plan. Don't take any traditional insurance plans who offer returns after policy ends.

Don't Mix Insurance with investment.

If you have any concerns while taking term plan, You can comment here or you can whatsapp me at 8801 64 8801.

Here's my Blog post on the Same Term insurance Comparison 2019

iii. Emergency Fund:

     You don't know when you lose your job, or sometimes we will need money for emergency needs. For that purpose we must maintain Emergency funds. It must be atleast 3 months of your income or 6 months of your spendings.

Park your emergency fund in Liquid Funds.

If you don't know about liquid funds, i will post another blog post about liquid funds soon. Till now, if you want to know more about Liquid funds drop me a whatsapp message.

Priority 2:

Follow 50/30/20 Rule

Rule	Purpose	Where to Invest
Rule 20	Once you Receive your Paycheck, You need to put/allocate at least 20% of your income into savings/investment accounts. Remember that this amount have to be utilize for long term goals.	If you want your money works for you, you must give equity exposure to your investments.
Rule 50	You can allocate max 50% of your income for your house needs and common spending Ex: House rent, EMI payments, groceries,insurance premiums etc.	Maintain separate account for your spendings. Its best practise to maintain joint acount incase both husband and wife are working
Rule 30	You can allocate max 30% of your income for your entertainment needs, Dining out,children toys or short term goals like foreign trip etc.	Save this amount to short term debt funds, So that you will get better returns than saving accout.

Note: I've developed few tools to calculate above mentioned terms. Drop me a whatsapp message i will provide you the link.