The need of financial freedom

The need of financial freedom

Today, India is celebrating 58th Independence Day. During these years we have achieved many milestones in many areas. We have made progress in each field like science, medicine, defense, infrastructure and many other sectors. But India still has a large population of the poor. A large section of India’s population are struggling for food and basic amenities.

We have still large section of people who have still not life insurance cover which is very essential for every citizen. Around half of the population have no bank account. Financial inclusion is the need of the hour for development and growth. It is very good sign that today during independence day speech our prime minister have shown commitment to open a bank account for each citizen with Rs 1 lakh insurance.

We are great saver but not good investor. Our domestic saving rate is very impressive and one of the top in the all over world. We need financial freedom for every individual. Financial freedom means every citizen should be capable to their future financial goal and leading towards peaceful and joyful life. To achieve financial freedom we will have to change the investment pattern. At present, majority of people invest in debt instrument like fix deposit which is not able to generate return to beat inflation. Before any investment, your target should be generate return which can beat inflation after paying taxes.

Equity investment is the best option for beat the inflation in long run and the long term capital gain is also nil. You can easily fulfill your future goal by investing in equity. We have discussed about this earlier in the past blogs and will discuss more in the next. Lets make a resolution for financial freedom for everyone.

If you want more information regarding investment or you have any other query about investment feel free to ask us.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

www.artofinvest.com

SIP Role in Financial Planning

SIP Role in Financial Planning

When we make our financial plan, we set some future financial goals and to reach those goals we also make some investment strategy. Systematic Investment Plans (SIP) is the best way to invest for your goals. In SIP investment we invest a fix amount in predefined regular time frame. The amount would be deducted from your bank account on the fix date of your choice. You can choose any mode of payment like monthly, quarterly or your specified mode. Here we will discuss some SIP related points which will be beneficial for you.

Assign your financial goal:

As we have discussed about in earlier post that every investment should have some purpose. Link your each SIP to a particular financial goal like children’s marriage and education, your retirement corpus, purchase new vehicle or house, foreign holiday tour etc. Your asset mix should have according to your investment time frame like if your goal is more than 10 year far from now then your asset allocation more tilted towards equity.

SIP Timing:

Many investors want to time the share market, however it does not make any sense in the view of return. If you invest in 4 different funds then divide your SIP date in different weeks in a month. Doing this you will take benefit of the volatility of the market. Monthly SIP is the best mode for salaried person. There are many modes available in the schemes like fortnight, daily quarterly and half yearly etc.

Increase your SIP Amount:

Every year when your salary increase, your SIP amount also should increase in line with increment. Most of the investor miss it and stay invested as per earlier mandated amount. With each increment in your salary you should increase your SIP amount also. It is called step up SIP. If you do not have a particular amount for SIP in current situation for a particular future goal the go with step up SIP and increase SIP amount every year to achieve your goal.

Portfolio Revision:

Every year you should review your portfolio. It does not means that the changes in investment strategy. It means if you are approaching near to your goal then decrease your equity portfolio and transfer it towards debt to avoid market volatility. If a particular asset class has performed very well then you can rebalance your portfolio according to your time, age and goal.

Invest in SIP is the best strategy to achieve your financial freedom. If you have any query or doubt, feel free to ask us.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

www.artofinvest.com

Few Points for Old Age Financial Freedom

Some Sutra for old age financial freedom

After a long 15 days vacation spending in my native place, I have came back to my daily routine life. My native place is Kanpur. I have also travelled many places in hinterland and met many people. There is some good news that the new or you can say younger generation is very serious about their financial future. The new generation now have hunger for knowledge and growth which is good sign for India. They understand better the difference between saver and investor. In typical saying we Indian are good saver but not good investor but I hope with all my positive energy this saying would change soon. India would be country of great investor. We will deliver more and more Warren Buffet.

In today’s short blog, we will discuss some important aspects for secure future. We often explore personal finance options at later stages of life when we have lost out on the opportunity to make the most of "power of compounding". Personal finance is one area which is almost ignored during our upbringing to become adult. There are few points which we should keep in our mind for secure future planning.

Buy Insurance at early age: Recognize your life and general insurance need. Keep in mind that insurance is not return generating asset, it is only a financial protection for yourself and your dependents against unfortunate emergencies. Be smart and get a good health insurance plan as early as possible.

Set realistic future goal: Apply SMART approach for your future goal. Simple, Measurable, Accurate, Realistic and Time-bound goals can be achieved easily. Don’t ignore inflation, interest rate movement and time horizon.

Start saving early. Make sure you could save upto 25% at your early earning stage as later it is very difficult to save. When you start save early, it make you more confident and happier. You can also gain from “power of compounding” through early saving.

Never blindly copy of others: You financial goals and condition may not be similar to that of your friends. Each person have different need, goal and risk appetite. Analyze your need, goal and risk appetite and invest accordingly

The conclusion of this article is that saving for future is essential part of everyone's life and all you need to do is start today and start small.

For more detail about any other query related investment, you can contact me through my email.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com