Investment is an alien concept for the Indian populace. For a country which till now was worried about making ends meet, this Knowledge of WEALTH CREATION is definitely a Rewarding experience. But, the truth is that if only they would have been introduced to the Art of Managing Money, life could have been so much easier. Most of us spend more than half of our lives working and saving because money is important, in fact crucial. However, most of us spend almost no time planning to make that hard-earned money work more effectively for us. So, how do you plan your financial life?
At RIF we will discuss concepts, ideas, goals, return, risk and various investment options as a whole keeping your family in mind first. Concepts such as inflation, power of compounding and other financial jargon will be explained in a simplified manner.
Financial Assessment is nothing but an assessment of your Family’s goals and the steps you must take to help convert a dream into Reality.
What you first need to figure out..........
Is your wish to retire with a sound lump sum amount or do you want a steady monthly income? Is your son's education or daughters' marriage worrying you? The key is to figure out your goals.
The most important thing is that you should know where your money is going. Zero-in on your monthly and annual expenses.
You should invest so that your money grows and shields you against rising inflation. If prices rise by six per cent annually it would not be sufficient if your savings only give you a return of four per cent. It leaves you with a deficit/loss of two per cent. The idea is that your rate of return on investments should be greater than the rate of inflation, leaving you with a nice surplus over a period of time.Whether your money is invested in stocks, bonds, mutual funds, Unit linked Insurance Plans or certificates of deposit (CD), the end result is to create wealth for retirement, marriage, college fees, vacations, better standard of living or to just pass on the money to your next generation. Also, it's exciting to review your investment returns and to see how they are accumulating at a faster rate than your salary.
The sooner the better. By investing into the market right away you allow your investments more time to grow, whereby the concept of compounding interest swells your income by accumulating your earnings and dividends. Considering the unpredictability of the markets, research and history indicates these three golden rules for all investors.
There is always a first time for everything so also for investing. To invest you need capital free of any obligation. If you are not in the habit of saving sufficient amount every month, then you are not ready for investing. Our advice is:
Avoid regular unnecessary or lavish expenses as they deplete your savings and thus your investment capacity. A dinner at the Taj can always be avoided. Rest assured, the pleasures of avoiding it will be far greater if the amount is saved and invested.
Clear all your high interest debts first out of the savings that you make. Credit card debts (revolving credits) and loans from pawnbrokers typically carry interest rates of between 24-36% annually. It is foolish to pay off debt by trying to first make money for that cause out of gambling or investing in stocks with whatever little money you hold. Infact it’s vital to clear a portion of the debt with whatever savings you have.