Are you financially stable or financially independent? There is a big difference between these two terms. If you are well paid, well off, have a good lifestyle but you can`t afford to stop working then that means you are justfinancially stable but not financially independent. Well, a large number of people retire without being financially independent.
To be financially independent you need just six simple steps:
1. Finding out how much money you have today
2. Knowing how much you need for tomorrow
3. Getting adequate life cover
4. Investing the surplus as per your risk taking ability, and writing a Will.
Home buying tops the priority list of all individuals and also is one of the most important asset that one builds. Also, with the availability of loan, which offers tax benefits, it becomes more beneficial.
While experts advise not to take loan for a depreciating asset, they say that individuals should be careful while taking a home loan and not over-leverage in a bid to build the asset.
"One should not stretch to buy the house, buy only when the income is sufficient to support the purchase and keep headroom to meet increase in EMI," said Amar Pandit, a Mumbai-based financial planner. The EMI should be such that it offers room for saving.
"Ensure that you save 10-30 per cent of your income after you have paid your EMIs as it will act as a cushion in rainy days and you will be able to pay the EMI from the corpus built," said Lovaii Navlakhi, managing director of the Bengaluru-based financial planning firm International Money Matters.
Once basic needs are covered, it is time to plan for wealth creation. Simple projections show that you do not need millions to make millions. All you need to do is begin investing - and begin early. An investment of Rs5,000 per month started at age 25 can become Rs1.6 crore by the age of 50 if invested in an instrument that returns an annual rate of 15 per cent.
"While equity and debt investment will differ individually, as a thumb rule one can allocate 100 minus your age in equity and the rest in debt," said Surya Bhatia, principal consultant at the Delhi-basedfinancial planning firm, Asset Managers. "Gold can also form a part and one can invest 5-10 per cent in it."
0 comments:
Post a Comment