Wednesday, August 22, 2018

3 detailed steps to be your own financial advisor - Financially Pro

We do planning everywhere whether it is for a picnic or movie or anything else.

Then why not for our money?
Think about the day when you're really planned about your money when you've received your paycheck?
Did you? Well, if yes then good and if not you need to do very soon.

Today after reading this blog, I'll make sure that you can be your own financial advisor.

In today's era's financial planning has become a need rather than want.
So today you'll learn to make a financial plan for yourself.
So, let's get started...
Know your networth

If you want to go anywhere first you need to know where you are.
So how to know your current financial position?
See what assets you have and what liabilities you need to pay off?
You can prepare a statement about your net worth.
What net worth?
Yes, net worth.

Start with all the big assets you have like a house, car, other vehicles. 
Check all the Insurance, investment in funds, FDs, other investments, jewellery, bonds etc.

Now comes liability.
Check your home loan amount, car loan, other loans if taken, credit card dues etc. 

Networth = total assets - total liabilities.

Your net worth decides where you are, not your income.
Although income level is important but net worth needs to be considered first.

Develop financial goal

90% of the people invest without having any financial goal.
Having financial goal like education fund, retirement fund, car fund etc.
Investing without any goal is just like sailing without having any particular direction, you can go anywhere.
The goal can be created by taking into consideration your financial position, income, desires.

Most important is to create a retirement corpus for yourself regardless of your age.

Monitoring your goal

Just creating your goal is not enough. It is very necessary to monitor it on a regular basis and making changes as required. 
Although you should not change it frequently, you should give it time to grow.

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If your goal is a short term like 3-5 years you should invest in debt fund or fixed income instruments where volatility is low so that your fund doesn't get much disturbed.
If your goal is a long term of more than 5 years then you should go for equity exposure.

But remember that choosing right kind of investment option for different goals is very important.
As your goal is coming near, you need to change composition of equity and debt.

I will talk about it in very depth very soon.

By following this steps you can have control over your money more properly.

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