It is 2020. If you have not utilised your past years well enough w.r.t to your financial goals and plannings, it is not too late. You can definitely make a positive start with 2020. We today mark out few points that will guide you through the process. You can include this as a part of your new year resolution (a resolution not to be broken).
1. FIRST Safeguard your family, your income and your savings: Term Insurance, Personal Accidental Insurance and Health Insurance is what we are referring to here. Term insurance protect your family’s future at a very minimal cost. Talk with your financial advisor for the sum assured needed for your family. A pure accident insurance policy, at a very minimal amount, supports your income in case of any temporary disabilities arising due to accidents. A health insurance protects your savings from being washed away in case of a medical emergency and the premium is very less compared to the current growing medical expenses.
2. PLAN YOUR RETIREMENT TODAY: You cannot work life long and even if you can, why you should? If you plan early you may even retire early. On a serious note, if you expect to live till 80 and you retire at 60 you will have to support yourself any your spouse for a long 20 years without a job or income and with possible increased medical expenses and inflation. To maximise your wealth, it is ideal to plan for your retirement the day you start earning. Investments with the support of Long tenure and the power of compounding can do wonders (SIP is a smart option). (But it is never too late. Start today)
3. DIVERSIFY your investments: There are varied investment options available with different levels of return and risk associated with them like equity, fixed return instruments, gold, real estate etc. List out your financial goals and associate the investment instrument with those goals according to the risk and returns associated, time period available till the goal date, the importance of the goal etc. Your risk appetite play a major role in this process. Sit with your financial advisor for a detailed planning.
— It is always better that you gain knowledge about the financial instrument you are investing in.
— You must review your investments and the goals associated with them time to time, to ensure that they are on track and make necessary and possible changes as may be required, with the help of your financial advisor.
— For long term goals, equity may be considered as the suitable investment instrument. But things to remember, DO NOT PANIC and BE DISCIPLINED.