What is financial planning :
Hello friends, we all know that a proper financial plan is the best way to reach our goals. You all know how to much money we need after 20 years from today, how to much insurance should you have? And from today onwards, you have to save and invest accordingly, take insurance policy number, retirement, and tax planning.
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Most people are not able to do financial planning well because they find it very complex as his brain drawing. They feel that it involves a lot of paperwork, time, and complexity.
And in such a situation, we think, remove it is it is going on, let it go, they put some money in mutual funds and some in the bank according to his residual income, just finished. So because of this, you lose a lot of chances of getting rich.
Today I will make your financial planning very easy so that you can do your own financial planning and you can complete your dream easily.
Today I am going to tell you 6 steps simple financial planning that you can do for yourself and complete all your goals.
Friends, before telling this financial plan today, you should know that my entire focus will be that you should be simple with every step simple. Which you can easily understand it.
Because a good financial plan is one that is simple and effective. If that plan is too complex then it is not a good plan.
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If your financial planner is suggesting too much insurance, too much retirement, then you agree that he is not giving a good financial plan near me.
The first quality of a good financial plan is that it is very simple. Today I will tell you why a financial plan is important?
So let's start with today's 6 steps simple financial planning.
1. Saving
2. Loans
3. Insurance
4. Investment plan
5. Tax plan and
6. Retirement plan
I am going to tell you all about them.
1. Saving :
One thing you always have to keep in mind that you have to save money of 6 months in your savings account according to the amount you spend to for your home from your gross annual income.
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Because if your job ever goes away, then you have 6 months of money so that you can easily run the expenses of your home, and till then you can find a new job near me for yourself. You can call it an emergency fund.
You can get as much interest as FD on your savings account and whenever you want, you can withdraw that money on the same day.
2. Loans :
You must know which loan you have taken on which you have to pay a lot of interest.
There are two types of loans, good loans, and bad loans.
Good loans are those on which less interest has to be paid. Like housing loan because only 8 to 8.5 per cent interest is charged on this. Do not rush such loans to the deposit. Because there is a lot of tax benefit on it.
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But if you have a personal loan on which 12 to 14 per cent interest is being charged and together if you have invested in mutual funds that will get you on 12 to 14 interest. So, first of all, you stop investing in mutual funds and you end your personal loan with the same money.
3. Insurance :
This is the step that scares many people. I have seen many people who have taken a lot of insurance plans.
There are many types of insurance like ULIP insurance, money bag insurance, Indolent plan, Terms plan. There is no need for all these.
You don't make such a mistake because so many plans will take you into depression.
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Keep the insurance simple. You do not need to take too much insurance plan.
First thing life insurance and second thing medical insurance.
You can only take life to ensure those members of your household who are earning. You do not need to take an insurance plan for your children right now. You have to take life insurance of 20 times your annual salary.
Suppose if your annual salary is 5 thousand dollars, then you have to take life insurance of 100 thousand dollars. If you want, separate critical insurance adds on it and there is no need for you to take life insurance.
Afterlife insurance, now comes the issue of health insurance, health insurance of all people should be in your house. Because if anything happens to any member, then you will have to spend money on it.
According to your income, you can do health insurance for all members of all households.
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But if you have the ability, then at least 5k dollars per member, health insurance is good.
So by doing this, life insurance, critical insurance, and health insurance you have taken. Now you do not have to take any insurance plans.
So now 3 out of 6 steps of your financial planning are over. Now you must be feeling that financial planning is so simple.
4. Investment plans :
You can invest in equity. You can choose stocks and mutual funds in equity. After this, investment in gold and real estate is also necessary.
Now we try to explain all these one by one.
Equity :
Two types of plans are available in equity, stocks, and mutual funds.
If your retirement is far away or your goals are also far away. If the higher education of your children is far away or your son's marriage is not yet done. So my advice to you is that you should definitely invest some money in stocks.
How much should be taken, which stocks should be taken? You should consult about this from a financial planner.
Here I would like to advise you that at least 20% of your monthly income should be invested in one or the other investment plans.
If you want to invest in stocks with the advice of someone, then it is a very good thing, if not, you must invest in mutual funds. This is one of the platforms that will definitely give more refunds than gold or real estate.
Gold :
Everyone should invest in gold and his best way is not to buy gold jewellery. Because it costs to make it, when we melt it, a lot of gold is lost. So it is very complex and returns are not good.
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If you are taking gold for investment, then its best way is Sovereign Gold Bonds. Because as much as the cost of gold increases, you also get more returns, and along with 2.5%, you will also get a fixed annual return in it.
Real estate :
In my view, it is not as good as real estate looks. It feels good because we leave it for years. We always have to make changes in the stocks and mutual funds. Due to which the returns are not gathered in it.
You must take at least one house in real estate because when you take home by a home loan, you get a lot of tax exemption. Apart from this, you can also take an office for your business.
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But real estate is not good for investment purposes. One is the mess of papers work, wealth tax, fear of occupation, maintenance, removal of the tenant, repair of the room for him. There is a lot of trouble with this. Overall, the returns are very less.
If you are doing a full-time real estate business then it is a very good thing. You get a profit in this.
5. Tax planning :
The most important requirement of tax planning is for those people who earn more than 6 lakhs. But if you have less income than this, then there is no need for too much tax planning.
Invest in the school fees of your children, some in the LIC policy, some in tax saving funds, there is a lot of tax savings.
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But if your income is more than 6 lakhs then you should do good tax planning. It has a lot of steps. You use the full 80'c. In this, you can show less your income by investing some money in mutual funds and buying life insurance with some money.
6. Retirement plans :
It is also a simple plan. First of all, see how much your expenses are today and also how much time you have left in retirement.
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So from today, you should accumulate that much money so that even after retirement, your expenses can run smoothly. For this, you can take the help of the SIP calculator.
Summary :
If you have taken all these, then you have completed 6 steps financial plan and together you have secured your life.
So it is so simple. Do not bring too much complexity. Because a good financial plan is one that is very simple.
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