Year 2014 has gone by and we are one year closer to our goals. This, therefore, is the right time to evaluate whether we have also moved closer to our projected financial targets.
If yes, Great!
If not, the following ideas to become rich should guide us to take appropriate action. These money-multiplying ideas have produced many crorepatis and millionaires.
1. Zero outstanding balance on your credit cards is an absolute must. This will stop huge sums of money going waste on exorbitant interest costs.
2. Buying sufficient health insurance cover for family and self too is an absolute must. This will stop huge sums of money going waste on exorbitant expenses on medical treatment.
3. Add critical illness cover and super top-up plan to reinforce your basic medical insurance policy.
4. Map your financial future before you begin your money journey. You must have a clear idea of where you stand, where you want to go and what are the best possible routes to reach there.
5. Needless to mention, the first rupee that you invest should not be in any investment. Rather, your first investment should be to acquire the right knowledge. This, and only this, will put you on the right path to riches.
6. Merging life insurance, investment and tax-saving into a single product has often delivered poor outcomes. Now is the time to prove our smartness by going in for separate products for separate objectives.
7. Time and again, foreigners have made money from our businesses. While FIIs pour in billions of dollars and mint money on our stock exchanges, we wait on the sidelines always fearful of the equity markets. I wonder when will we view equity as a lucrative asset class and not as a gambling casino. Don't buy direct equity; bank on the expertise of mutual fund managers.
8. If, in 2015 and a few years beyond, inflation softens and remains at mild levels, debt mutual funds could deliver brilliant returns. This, therefore, is an opportune time to take a 3-4 year bet on the long-term debt funds.
9. Moderating inflation would lead to moderation in FD rates. This, together with the fact that entire interest income is taxable, would make FDs a bad investment... especially for those in the higher tax brackets.
10. Low inflation also means low interest rates. This, in turn, could motivate people to buy more properties. So an opportune time to also look at property as an investment.
11. Unless the world economy collapses, the recent "golden period" for gold is possibly a history; at least over the next few years. So we must tone down our "excessive" liking for gold.
12. Work out a suitable mix of property-equity-debt-gold... appropriate to your financial profile... and there is no reason why you should not soon feature among the rich elite.
13. As our calenders change, the portfolio structures get distorted for varied reasons. In some assets there is over-exposure and in some under-exposure. Besides, some assets fail to live up to their expectations. To mitigate risk and improve the efficiency, our portfolio should be periodically restructured and re-balanced.
14. Don't forget to write your will and have all the nominations in place. These are a must to ensure smooth and quick transfer of your assets to your legal heirs.
15. Of course, don't go overboard with budgeting, planning and investing. You have to add an appropriate dose of spending and splurging too. After all, as the cliche goes... All work and no play makes Jack a dull boy.
The year may be new. But the resolutions are, more or less, the same old ones. Why?
Because, I am certain that many of these commitments, made year after year, have remained on paper only.
Hope you give me a chance to say something "new" in next new year. Or better still... hope that by next year you become so rich that you don't have to read all this preachy stuff.
If yes, Great!
If not, the following ideas to become rich should guide us to take appropriate action. These money-multiplying ideas have produced many crorepatis and millionaires.
1. Zero outstanding balance on your credit cards is an absolute must. This will stop huge sums of money going waste on exorbitant interest costs.
2. Buying sufficient health insurance cover for family and self too is an absolute must. This will stop huge sums of money going waste on exorbitant expenses on medical treatment.
3. Add critical illness cover and super top-up plan to reinforce your basic medical insurance policy.
4. Map your financial future before you begin your money journey. You must have a clear idea of where you stand, where you want to go and what are the best possible routes to reach there.
5. Needless to mention, the first rupee that you invest should not be in any investment. Rather, your first investment should be to acquire the right knowledge. This, and only this, will put you on the right path to riches.
6. Merging life insurance, investment and tax-saving into a single product has often delivered poor outcomes. Now is the time to prove our smartness by going in for separate products for separate objectives.
7. Time and again, foreigners have made money from our businesses. While FIIs pour in billions of dollars and mint money on our stock exchanges, we wait on the sidelines always fearful of the equity markets. I wonder when will we view equity as a lucrative asset class and not as a gambling casino. Don't buy direct equity; bank on the expertise of mutual fund managers.
8. If, in 2015 and a few years beyond, inflation softens and remains at mild levels, debt mutual funds could deliver brilliant returns. This, therefore, is an opportune time to take a 3-4 year bet on the long-term debt funds.
9. Moderating inflation would lead to moderation in FD rates. This, together with the fact that entire interest income is taxable, would make FDs a bad investment... especially for those in the higher tax brackets.
10. Low inflation also means low interest rates. This, in turn, could motivate people to buy more properties. So an opportune time to also look at property as an investment.
11. Unless the world economy collapses, the recent "golden period" for gold is possibly a history; at least over the next few years. So we must tone down our "excessive" liking for gold.
12. Work out a suitable mix of property-equity-debt-gold... appropriate to your financial profile... and there is no reason why you should not soon feature among the rich elite.
13. As our calenders change, the portfolio structures get distorted for varied reasons. In some assets there is over-exposure and in some under-exposure. Besides, some assets fail to live up to their expectations. To mitigate risk and improve the efficiency, our portfolio should be periodically restructured and re-balanced.
14. Don't forget to write your will and have all the nominations in place. These are a must to ensure smooth and quick transfer of your assets to your legal heirs.
15. Of course, don't go overboard with budgeting, planning and investing. You have to add an appropriate dose of spending and splurging too. After all, as the cliche goes... All work and no play makes Jack a dull boy.
The year may be new. But the resolutions are, more or less, the same old ones. Why?
Because, I am certain that many of these commitments, made year after year, have remained on paper only.
Hope you give me a chance to say something "new" in next new year. Or better still... hope that by next year you become so rich that you don't have to read all this preachy stuff.
