Following are some basic rules to help you avoid financial mistakes and to help remain financially independent
1. Emergency Fund: Maintain a Fund in the form of cash or cash equivalent like Liquid Mutual Fund, sufficient to meet 3 to 6 months of expenses
2. Health Insurance: Hold a comprehensive Health Plan to meet the hospitalization expenses in case of any medical emergency for self and dependents
3. Life Insurance: Hold a suitable Term Plan (Minimum: 10 to 15 times of one’s annual income) along with a Critical Illness rider so that your dependents remain financially independent
4. Managing Liabilities: Keep your liabilities low, ideally Nil! Avoid borrowing and credit card usage unless very essential
5. Budgeting: Maintain a monthly Budget to help prioritize your expenses and allocate resources in an optimal manner
6. Goal Based Investments: Adopt a structured approach to savings and investments by defining your Goals and following a suitable financial plan based on your risk profile.
7. Succession Planning: Have a suitable plan to ensure a smooth transfer of your assets to the next generation through instruments like Will, Trust. Take care to have Nominations in Bank Accounts and Financial Investments.
Important that the family is involved in the discussion and kept informed on the above matters. Consult a financial advisor who can assist you in taking the right decisions.
Financial planning is a continuous journey, make sure you have started! Thank you for reading.
“If you fail to plan, you are planning to fail” - Benjamin Franklin
DISCLAIMER: THIS BLOG IS FOR INFORMATION AND NOT TO SOLICIT ANY BUSINESS. ALTHOUGH BEST EFFORTS ARE MADE TO ENSURE THAT ALL INFORMATION IS ACCURATE, OCCASIONALLY UNINTENDED ERRORS AND MISPRINTS MAY OCCUR. IT IS VERY IMPORTANT TO DO YOUR OWN ANALYSIS AND SEEK PROFESSIONAL ADVICE BEFORE MAKING ANY INVESTMENT BASED ON YOUR PERSONAL CIRCUMSTANCES. MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS; READ ALL THE SCHEME RELATED DOCUMENTS CAREFULLY. THE PAST PERFORMANCE OF THE MUTUAL FUNDS IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE OF THE SCHEMES. BARAKAH FINSERVE LLP OR ITS STAFF WILL NOT BE RESPONSIBLE FOR ANY LOSSES ARISING OUT OF ANY INVESTMENT DECISION YOU TAKE