You should definitely endeavor to set your financial goals carefully, depending upon various life stages. You should consult a professional financial goal planner in Indiawho can guide you through the entire procedure. It is no rocket science as to building a good financial blueprint or plan for your needs. The first thing to remember when you are thinking of financial planning is that you should start early.
You should carefully check out financial mutual funds which help you achieve your goals with care. Your financial goals will naturally vary with the onset of age and changes in your responsibilities. You should remember that starting early is always the best way to reap the benefits of compounding. The sheer power of compounding cannot be underestimated. It makes a huge difference. When you are in your early and late 20s and without too many financial responsibilities, you should ideally invest in mutual funds. You can afford to take on a little more risk in this period and allocate a slightly higher percentage of your salary towards investments. Stay invested for the long haul and do not withdraw in the face of temporary market fluctuations or volatility.
Even if you invest smaller amounts via SIPs over a longer period of time, compounding and rupee cost averaging will work magically to your benefit. You should resist the temptation to spend more and save less when you are young and in the early stage of your career without too many responsibilities. Talk to a good financial goal planner in India who can help you save enough for the down payment on your first home in the future if you need it or buying a car or higher education or even your wedding. If these are anyway sorted, consider yourself lucky that you can invest more for securing your retirement while meeting tertiary goals like foreign travel or buying something that you always desired.
You should also plan for exigencies and build up a corpus to tide over scenarios like job losses, income fluctuations, sudden expenditure, market crashes and so on. There should be a contingency fund in place and you should build this up all throughout your professional life. Additionally, you should have proper life insurance coverage for the entire family and also health insurance. These are non-compromises. Have some money kept in post office savings or FDs for security along with PPF and EPF. Then allocate money towards mutual fund investments and stocks. This proportion may increase with increasing income while the period between 30-45 may be all about consolidation and holding onto past investments. Also keep your EMIs strictly within 50% of your net take-home income.
Your risk-taking ability will go up with increases in age and income. Once you are clear of home loans, children’s basic schooling and other expenses and so on, you can invest more in the last 10-12 years of your senior professional career towards securing your retirement. You can increase the risk quotient likewise. Track your financial plan regularly, rebalance and re-allocate, depending upon your needs and also make sure that you have clearly listed out short term and long term goals alike.
