Want more money? BREAK FREE - This what your financial journey should be | Actionable points for you
It is no wonder that their life is comfortable and they do not suffer financial worries that plagues most everyone in the country. So, how to ensure you get more money? By planning properly and keeping it simple.
Yes, everyone wants more money, but those who are smart and keep it simple, actually end up getting it. It is no wonder that their life is comfortable and they do not suffer financial worries that plagues most everyone in the country. So, how to ensure you get more money? By planning properly and keeping it simple. Here are some actionable steps that everyone can take without any problem. But remember, you must be disciplined. Omkeshwar Singh, Head- RankMF, Samco Group explains:
There are basically 3 ways to manage your finances:
1. No assets No liability: Whatever is income gets used in expenses. Hardly any Investments and therefore throughout life no meaningful Asset gets created.
2. Some assets and more liabilities: There always remains a shortfall, and inadequate Investment, therefore throughout life it's EMI servicing and by retirement some Physical assets are available.
3. More Assets and less or No Liabilities: High Investment and these Investments become source of 2nd Income as well as asset creation. Post retirement no dependency, complete Independence. Also wealth gets transferred to next generation.
To break free from 1 and 2 scenarios for financial Wellness, one must ensure that investors spend what remains after Investment and not the other way around.
Based upon age profile and Risk Assessment, Investors can be broadly classified under 4 categories:
1. Young Individual professionals in 20s
Investment should be at least 10% to 15% of Monthly income.
Objective is to Create Long term Corpus (For Gadgets, Marriage, Car, Home, Child Education, Vacation and retirement Corpus) and Let the power of compounding play out at full throttle!
Investment Horizon: 25 to 30 years - Post that shift to lower Risk Portfolio
Aggressive Portfolio: Equity Mutual Funds (Multi Cap (Existing ones), Mid Cap, Small Cap and ELSS - for Tax Saver)
2. Young Couples in Late 20s or early 30s
Investment should be at least 15% to 25% of Monthly Income
Not more than 50% of the income should be for living Expenses
Objective is to Create Corpus (For Car, Home, Child Education , Vacation , retirement Corpus)
Investment Horizon: 20 to 25 years - Post that shift to lower Risk Portfolio
Growth Portfolio: Equity Mutual Funds (Multi Cap (Existing ones) , Large Cap , Mid Cap and ELSS - Tax Saver)
3. Family with Kids, main earner in early 40s
Investment should be at least 25% to 40% of Monthly Income
Not more than 40% of the income should be for living Expenses
Objective is to Create Corpus (Child Education, Child Marriage, Vacation, retirement Corpus)
Investment Horizon: 10 to 15 years - Post that shift to lower Risk Portfolio
Stable Portfolio: Equity and Hybrid Mutual Funds (2 Multi Cap (Existing ones), Large Cap, Balanced Advantage)
4. Retired Individuals, 60+
Investment 85 to 90% of Retirement Corpus should be invested in Lower risk Debt and 1 Hybrid Balanced Advantage to beat inflation.
SWP (Systematic Withdrawal Plan) to be done for the Monthly Expense
Objective is to get regular income for Monthly Expense and other requirements
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Investment Horizon: till the end
Low Risk Portfolio: Debt and Hybrid Mutual Funds (Gilt, Banking and PSU, Corporate bond and Balanced Advantage)
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