Category Archives: Blog

Habits that hinder your wealth management goals

“If money management isn’t something you enjoy, consider my perspective. I look at managing my money as if it were a part-time job. The time you spend monitoring your finances will pay off. You can make real money by cutting expenses and earning more interest on savings and investments. I’d challenge you to find a part-time job where you could potentially earn as much money for just an hour or two of your time.” 
― 
Laura D. Adams, Money Girl’s Smart Moves to Deal with Your Debt

The former bridge that connects your dreams, ambitions & goals to reality is hard-earned finance. Wise financial and wealth management is an affluence and beneficial task. It moulds class in your ways of living and enhances your personality as you grow.

There are, however, a few habits that cause to be barriers to an efficient wealth and finance management in your life-

  • The Race of Fitting In

We live in a society that has its own, self-formed rules, norms and cultures. In such a fast-paced environment, we tend to get influenced by trying to submerge within the crowd in order to be accepted by our fellow mates. People tend to choose an extravagant lifestyle in order to outsmart one another without keeping basic facts in mind. Materialism has got individuals to overlook relevant elements like financial security, repayments of debt & seeking satisfaction in real life.

Whether you are an entrepreneur or a professional – you are bound to be unaware of what happens the next second. The traditional buzz of consumerism and materialism is slowly taking away the wealth, freedom and peace of mind of three out of four people all around the world.

  • Absence of Basic Discipline

Discipline refers to following a code of conduct or wise behavior to flush out the disobedience & negative perspectives from your life. In simpler words, it is the ability to deny on doing a particular action when others are about to commence it with due respect to moral ethics and acceptance of right versus wrong. Not many are aware of this, but discipline brings along freedom as it comes – the freedom of not living in the guilt of doing something your conscience does not allow.

But, how does discipline affect your wealth management goals? Lack of routine, overhead and unwanted expenses, investing your hard-earned money in unhealthy habitual expenses etc. can hinder your progress in life with each tick on the clock. It is like a vicious circle of disturbed behavior where true content gets far away from your reach at each moment of continuity.

  • Loss of Initial Purpose

Success is said to be a journey, not a destination. Being said that, there has to be an initiation point. This provocative point is called purpose. Your entire future, savings, investments, ideas & concepts in life are solely dependent on this purpose. Sense of direction is a very important part of your life. You should be aware of your goals, integrating each step before execution and taking former efforts to record your progress from time to time in order to remind yourself of where you stand.

Proper alignment of your financial goals can only be accomplished with consistent hard work. And so, for efficient hard work – you must know true relevance of the fruit you are set to attain since day one. Commitment and devoir are the secrets to true success.

  • Incorrect and Absurd Investments

Investment decisions can be tricky and hard to understand at times. In times as such, always remember that salt also looks like sugar. In other words, do not end up believing and investing your hard-eared money on just what you’re shown in the first go. Always follow three golden rules before making an investment (big or small): Analyze, Improvise & Appraise. The motive is never to arrest the idea of investments, rather it intends on rearing the habit with intelligence and wisdom.

Each and every minute agreement should be under a legal and logical supervision before any decision is finalized, let alone a penny invested. Never hesitate in taking professional investment training before speculating and venturing out – for you should always intend on being better than the best. Saving on shrewd investments can help you save the money for better investments to enhance your financial security or status in a trillion ways!

  • Consumer Debt

Debts are broadly divided into two categories: good & bad. Good debts comprise of acquired investments which return profits, a portion of which helps repay the liability timely & make furthermore investments. While a bad debt or a consumer debt encompasses of unwanted liability and unwise investments which lead to financial crisis at its peaks.

Loan is served with the purpose of providing financial support which ought to be paid back with the respective interest rate. Utilizing loans for holidays or personal reasons that provide temporary comfort (lacking an occasion or relevant purpose) can be sheer stupidity. Hence, it is upon you as to where you wish to invest such a monetary form that holds liable responsibility and accountability to another financial institution as the repayment is bound to cost you more than you withdraw initially.

“The speed of your success is limited only by your dedication and what you’re willing to sacrifice” 
― 
Nathan W. Morris

If you think you need to mend ways in your life and value your hard work by choosing to be financially strong, independent and intelligent for circumspection and efficiency has never let a man down, start now. For regular updates on your Finances, please visit & subscribe to our website, www.sbsfin.com

Career Mistakes to avoid for better Financial Dynamics

“Write your own book instead of reading somebody else’s book about success.”

Herb Brooks

Career refers to a particular professional lifestyle choice that an individual makes in order to independently sustain in life and the society he/she lives in – earn a living and contribute to the economy. There is an immense competition in the society and hence, you need to integrate your ideas and strategize each step prior action.

One of the biggest snags that latch along with even a passion-based profession or career prospect are career mistakes which ought to be avoided and prevented upon for a better formulated future and management of financial dynamics. At SBS Fin, we work with lot of Millennials who are passionate and live a life of dreams and their idea is to fulfill each one of their dream – and that is where financial dynamics become significant.

Whether you are in a part time career, full time career, making a side income through your hobby, you must know the significance of financial fitness. Your life goals must have a financial goal as that forms the basis of all life goals.

How you are prone to make unwise decisions and career mistakes that incur a loss of assets and finance?

  • Overconfidence in your work
  • Rigid mindset about the future
  • Misunderstanding what you really want with momentary-influenced choices
  • Devaluing the company you work in
  • Lack of communication with co-workers
  • Distraction and Pessimism
  • Indecisiveness and escaping the reality

The root cause of a tremor in the management of financial dynamics with all due reference to career mistakes is misunderstanding the time value of money. As a practice we are not taught money management during childhood or even growing up years and the repercussions lead to complicated financial dynamics and the millennials struggle as they grow the corporate ladder parallel to their wish lists.

Below are a handful of ideologies with parallel financial mismanagement consequences which can act as a reference for you to clear of what the concept demands-

Analyze your skills and widen your scope of attaining potential

An individual should be wholly aware of his/her skills and strengths. Some people can be sharp at analytical skills while some might have strong logical skills and so on. The primary purpose is to enhance your existing skills and increase focus on creating progress. If you make regular expansions in your professional skill sets by exercising certain skills with mind games or by reading, it is bound to serve the purpose. It is important that you stay constantly focused, less over-confident and up-to-date about your field of profession in order to move forward.

Financial Dynamics Precaution: Investing money to achieve your goal is not the problem – the problem lies in being unable to understand your skill set and making the investments in wrong places instead. Life is all about risks but it is not wise to follow the same while handling finances in link to your career prospects. If you are in a stage where you are contemplating a career switch, trying an alternate career – the same should not impact your financial dynamics. Similarly, constant learning and skill building can be attained for growth if you have a balanced financial dynamic.

Do Not Settle

You must undoubtedly love your job. But that does not entitle you to permanently settle for what you do without exploring all your options. What inspires you now might just appear to you as an eye-candy in the times to come. Try to understand what the company/business expects of you and where you stand as an individual. Apprehend the goals that you have set for yourself, while simultaneously give your best at each opportunity you get to stand for your organization.

Financial Dynamics Precaution: We breathe and function in the upcoming Internet-Economy that helps us be potential to earn more money than we usually do. You should be consistent but not lazy and futile. Life is all about moving forward with the right pace, meaning do not hesitate in doing anything within your reach to maximize your income by moving forward in your field of profession and focusing on big money events in order to gain money and invest it in yourself. If you plan on boosting and pushing your income at an initial stage –  you tend to open doors of opportunities for a brighter future. Whether we work with solopreneurs or SMEs, our financial fitness expert Rashi Bhargava believes in not settling- she maintains one should not settle especially when it is about Emergency or Health corpus.

As a financial planning and wealth management company, we do not believe in settling as well. Whether it is the financial literacy, financial fitness tactics, physical fitness for financial fitness, wealth management tactics, portfolio updates etc, we believe in keeping our clients updated about the new products in markets.

Maintain the Focus & Remind yourself of the reason behind your Choices

Indecisiveness is the last thing that should come your way if you expect on outshining yourself from the past – to a better future. There can be instances when you would feel distracted of or think of negative things while you imagine yourself with your professional / career choice, years down the lane. This is a common feeling. The primary reason for which you need to analyze your skills and passion is to be aware of how inspired are you of your choices and of how much do you really value its worth. Not each opportunity comes your way casually, you have to earn it! You should feel satisfied with your career choice and be honest to yourself about it. You should ensure that your financial investment towards it and the energy devoted in attaining what you have is priceless and should serve the purpose of helping you spree at each opportunity.

Financial Dynamics Precaution: Always remember the motive behind each financial investment you opt for. For instance, if you plan on taking a loan for your education, it will hold value; whereas, if you choose to take loan in order to plan a trip with your family, friends or associates with the idea of repaying back, remember that it isn’t as worthy of the financial liability as it looks. Focus and confidence in self are the primary keys to attaining your prospective goals and you stand nowhere if you choose to ignore the basic financial equation: Income – Expenses = Savings.

Face the Reality

There is no guarantee or a form of security that ensures a consistent future. Focusing on factors like the stability, reputation and worth of your organization in the market plays a major role. No external factor can ever be secure and ascertained, except your internal will to grow and do better – hence you should be flexible with time and keep tabs of the circumstances around you.

Financial Dynamics Precaution: It is essential that you address to real-time common issues in finances within your environment. Always keep a backup financial plan for bad times and circumstances. Don’t just focus on curbing expenses, try to enhance your income by pursuing side-jobs or moving onto better jobs if the financial offers are more advance.

Henceforth, you should learn as to how and where to invest your assets, time & efforts and seek a brighter future and never stop believing in yourself!And if you think you need a personal session on financial goal setting, feel free to write to us on: contact@sbsfin.com

Mental Wellness for Physical & Financial Fitness​

WHO defines Mental health as a state of well-being in which every individual realizes his or her own potential, can cope with the normal stresses of life, can work productively and fruitfully, and is able to make a contribution to her or his community.

Mental health, mental illness, Physical health…. these words are fast gaining popularity in the world of working professionals, millennials and young children. Since we cater to these age groups, our annual theme of client engagement is kept around fitness and its significance for financial fitness.

When we interact with our clients, for their financial goal setting or their portfolio management or even during the redemptions, it is understood that we are all living in a complex, interconnected world – there is an interconnection between the mental, physical, and financial health spheres, with an imbalance in one affecting the balance in another.We are all running from one thing to another in our daily lives without taking a breather to think and reflect.Mental health is becominga serious issue. There is a lot of talk on direct relation between physical fitness and financial fitness but little has been spoken about mental health and its interconnection with physical and financial fitness. Stress is no more a buzzword, it is serious and has started taking a toll on good health & everyday productivity. The new age prescriptions are not about medicines but they are about Detox. We need to stop at least sometimes and look back and need to look at our own self, we can also consider at it is, do I really need to do this?

Despite our limited view and understanding of mental health as something quite separate from our physical selves – study after study has shown just how connected mental health is to other health measures, like physical and financial fitness. All 3 issues seem to be separate issues but they affect each other in multiple ways.

Mental stress has shown to contribute to chronic illness like High BP, Obesity, Diabetes. Conversely, people with chronic physical conditions like diabetes have twice the likelihood of experiencing a mood or anxiety disorder when compared to those without a chronic physical condition.

Similarly, poor financial health/fitness (Debt/lack of savings) can affect physical well being, economic productivity through stress and other factors. The fitter you perceive your financial situation, the better your physical and mental health.Same way factors like lack of sleep, relationship issues, poor physical fitness go hand in hand with poor perception of financial health. This works vice-versa but health is prime as that will enable us enliven our financial dreams and also to fulfil our bucket-lists and wish-lists. And if you have  good health, you certainly are going to have good life.

Our first client engagement activity theme was Physical Fitness=Financial Fitness. Before we take up mental wellness in depth, here are the quickie hacks on Good Posture & Muscle Health:

 

  1. Stretches and Movements are good in daily routine.
  2. Practice exercises for upper body even when you are sitting at your workstation
  3. Stand on your entire foot.
  4. Always sit with back upright.
  5. Challenge your balance
  6. Maintain a routine regime for exercise – it can be as little as 15-20 minutes a day.
  7. Always follow good posture – as that is the way to healthy muscles &brings agility.

But as my understanding grew and my first   hand experiences of being a care giver to mentally ill patient at home forced me to think on mental health too. Majority of our clients in the age bracket of 25-45. We are rather unfortunate to be working in challenging times where stress is part and parcel of our lives. We are constantly running to meet our deadlines at home and work front. We no longer have the luxury of job security. Increasingly youngsters are complaining of health issues like high BP, Anxiety, obesity, back pain, depression….

It’s high time we start factoring in mental health, physical health and financial health as part of integrated strategy for ourown well being and well being of our clients,employees and other stakeholders…Their mental well being, physical health and financial fitness are all ingredients for happy, productive and successful stakeholders.

Because we understood the need of the hour, our Lap of Fresh Air Fitness was around Physical Fitness and Mental Wellness.

Following are some basic take ways on mental wellness from the session by Clinical Psychologist Ms.Alisha:

 

  1. Sleep well and maintain a minimum 7-8 hour sleep every day.
  2. Develop a routine for meals and follow that at least 5 days a week.
  3. Do not ignore sleep disorders – consult an expert
  4. Say no to junk food
  5. Keep a check on your emotional health. Detox from gadgets and have more of real conversations
  6. Exercise regularly – body & brain both.
  7. Reading is a good exercise for brain.
  8. Breathing is a good exercise for mental health.

Couple the above tips for mental wellness with the physical & posture tips as shared in Lap 1 and Lap 2 of Fresh Air Fitness Engagement programs of SBS Fin. Work on your health and maintain a good health corpus, both of these combined will ensure Financial fitness and freedom for your future life.

To know more about the Lap 2 of our Fresh Air Fitness event or to speak to our experts for Financial Health Corpus & planning, write to contact@sbsfin.com

 

Documents required whilst purchase of a House

Buying a house is one of the ultimate dream in each & every Indian household. And as to many people, we felt there is a need to understand the basic documents required to purchase a house in India. Many a times, the buying of a house is seem to get stuck or delayed due to mistakes in the documentation. That is the reason team SBS Fin decided to share the details on documents required for purchase of a House in India.

A proper checklist is the most paramount step in property (house) purchase procedure. It involves a statutory and regulatory framework. Yet, it is so common that almost 80% of the clientele fail to submit and get complete documents at the time of purchase. Two things should be kept in mind prior purchasing a property:-

  1. Inquiring and analyzing various competitive costs and modes of funds.
  2. Protecting yourself from being a victim to sheer fraudulence.

Following is a list of documents to be checked before buying a house:-

  • Mother Deed/ Sale Deed/ Conveyance Deed

These are the former legal document that helps tracing the antecedent ownership of a property under the deal. Alternatively, in the absence of a mother deed, you must make sure that you obtain certified copies. A sale deed acts as the cardinal legal document for creating evidence for a sale and transferring ownership of property in favor of the buyer. You must also check whether the property under the deal bears a clear title, well-in-time before the sale deed is formulated.

Main Purpose of the document (strictly original): To establish esteemed ownership of the seller.

  • Khata Documents

Khata refers to an account, which, in this context means an account of an individual who owns property in the city. Khata documents are broadly divided into two categories: Khata Certificates and Khata Extracts.

The purpose of a Khata Certificate is for the initial registration of a new property and for transferring of a property. Khata Extract, on the other hand, is used for ferreting out details from the assessment register. This document is required to obtain trade license or to buy a property.

Main Purpose of the document (strictly original): For the transfer of property.

  • RTC Documents

This document is issued by the Village Accountants, containing extensive details about the extent of land in a survey number. It also contains details like the names of present and previous owners of the land, their tenants, mortgages, details of the soil, etc.

Main Purpose of the document (can be a copy): To establish title of the land.

  • JDA (Joint Development Agreement)

This property document forms an agreement between the builder and the individual landowner that ensures the landowner contributes the land and the builder undertakes advancing activities on it.

 Main Purpose of the document (can be a copy): To ensure distinctive authority and establish whether original title rests with the Builder or the Landowner

  • Power of Attorney

The general power of attorney is a prospect and legal document in which a person is given authority by another person to act on his/her behalf as the legal representative. This person is bound to make lawful financial and legal decisions.

Main Purpose of the document (strictly original): To ensure whether the prior Purchase/Sale was carried out by an authorized seller/buyer.

  • Authoritative Documents

The documents that come under this ensure that all government-related facilities are implemented and provided legally and procedure-wise. Even before starting construction at a site, the builder requires a NOC from all key Government Departments in full and revised authority. This can also lead to increase of expenses.

Main Purpose of the document (can be a copy): To legally ensure that all Govt. approvals are in place.

  • Construction Agreement

It is a vital property document which ensures legal permission for execution of work related to construction and involves transfer/sales of goods. This document should be submitted in original forum.

  • Demand drafts & Drawings of the property
  • Property Assessment Extract
  • Up-To-Date Tax Receipts’

This ensures that taxes have been paid regularly and on time until the date of sales, with bills like that of water or electricity should also be analyzed.

  • Foundation Certificate
  • Letter from the Builder

This warrants possession of the property and it being delivered to the buyer on the date specified in the letter as a note of verification. This document is required in an original form.

  • Sale Agreement with the Seller
  • Demand Letter from the Vendor
  • Contribution Receipt of the owner with Bank Statement
  • Release Deed
  • Completion and Occupancy Certificate
  • Deed of Declaration (To transfer ownership legally to the original buyer by the builder)
  • Auction Sale Confirmation Letter

This letter is issued by from the Local Development Authority and is required in case of any site purchased by independent house owners by methods of Auction by Local development authority. A copy of this document is permitted to be submitted (instead of the original).

There are a few more of documents which might be required for this purpose; however, the above is an overview of all the basic documents you need to efficiently prepare in order to formulate a legal and beneficial purchase of property. You should also seek professional guidance in order to gain immunity against ambidextrousness and artifice. For more details on Home Purchase or Home loans, feel free to write to us on rashi.bhargava@sbsfin.com

Personal Finance for Millennials

Your economic security does not lie in your job; it lies in your own power to produce – to think, to learn, to create, to adapt. That’s true financial independence. It’s not having wealth; it’s having the power to produce wealth. – Stephen Covey

 Over the years of changing generations, the millennials have advanced the basic meaning of work through various economic and corporate trends. Each individual – in today’s time – faces hardship in stabilizing and balancing their wealth with personal life, which is why it is essential to gain ascendancy over your personal finances and wealth.

The exercise of the principles of finance to follow-up monetary decisions of an individual or a whole unit is called personal finance. This focuses on righteous spending, saving, budgeting and other financial activities with variant monetary resources.

Why is Personal Finance Important for Millennials?

  • To create wealth and value your net worth.
  • To avoid, annihilate and eliminate debt.
  • To track financial budgets.
  • Helps you expand your horizons to discover various financial opportunities.
  • Better understanding of accounting, tax and legal formalities.
  • Helps you attain your best interest.

 

Following are certain guideline one is advised to adopt in order to set personal finances right:-

 1. Draw A Line

It is very important that you understand of where to draw a line with your personal finances. This means realizing the aberration between investments in personal assets and business investments at individual basis. A prospect and young entrepreneur should never adhere their future and potential to the success of companies they work in. You should not hesitate in investing a part of your finance to follow your passion if you maintain financial security. Self-employed Millennials should aim at constituting miscellaneous and long-term invested portfolios that help them grow beyond a comfort zone because financial planning is not just limited to numbers – it should help you build yourself with ardor.

2. Maintenance of your Books

Business is all about risks, but do you know the biggest risk of all? Not taking any. In the process of building your organization, you tend to follow-up higher and heftier projects, charter more workforce and so, you have to be efficient enough to maintain competence and expertise. It is vital to address minute details along with achieving goals. For instance, the financial management of your company, i.e. a well-structured and methodized budget, should meet the required needs and smoothly help the organization pass the tax season. Top-quality accountants and financial advisors are the pillars of this financial management; they utilize avant-garde technology to keep a record of assets whilst providing personalized guidance like deploying more capital in certain areas or cutting back costs.

3. Formulate a Disciplined Savings System

Financial security and independence is an esteemed ritual in every Millennial’s livelihood. For instance, every time your business generates revenue – pay yourself a portion of proceeds. The capital of your company is utilized in payment of bills, debts and salaries. While on the other hand, when done with the management of these accounts, a portion of fixed amount to yourself can allow you to frame your personal budget and uniform long-term savings plan.

4. Hire Professional Advisors

To help meet primary and basic planning requirements like integrating a saving schedule for personal budget, Millennials are required to contend with more and forthcoming financial needs of their businesses. You need proper and expert guidance to undergo and take financial and economic decisions.

Henceforth, Personal finance helps accede high-financial literacy for Millennials and thus, should be followed for a productive future.

At SBS Fin, our financial fitness expert Rashi is on a mission to spread Financial Literacy and Physical Fitness for the millennial generations. She is a financial coach to many startups of the millennial generation and is also spreading awareness about Physical Fitness as one of the mantra for Financial fitness. SBS Fin is regularly engaging its clientele in educative events about health & lifestyle to pursue their goal of maximizing avenues for financial fitness among the millennials. You can reach Rashi through the contact form or email her on, rashi.bhargava@sbsfin.com

What’s your plan to enable a smooth retired life for your Parents?

In India, the kids have always been considered as the ultimate investment for your retired life. We can call it societal norm, peer pressure or the way families have been run & managed since ancient times when there was nothing like social security, pensions or facilities for that matter.

What still exists however it the fact that to secure the future of the kids, parents constantly try to give their offspring the best and therefore they end up risking their own future. Be it the education of children, weddings, settling them off with a house or a business – the Indian parents are mostly found without a proper and well managed plan of retirement.

The reason why having a retirement plan has become so significant is our expenditures are on arise, the lifestyles have evolved and therefore the expenses related to lifestyles. Our generations spend a lot on gadgets, some of these were not even in the market until then. When you are young, you ought to spend a major chunk on the extracurricular activities of your children, you also invest hugely in aesthetics – be it for your car, room, office or home. Some of these expenses were almost non-existent 2-3 decades ago when our parents should have planned for their retirement.

All of the above reasons make it all the more significant to Invest or to Help your Parents Save for Retirement. Here’s how we can do it:

Start now!

Do not wait or contemplate about the timing. Start the conversation now and ask your parents if they have any plan on how to handle any expensive emergencies or explain how this conversation can really help.

Tip: Try and do it for both sets of parents to avoid any sort of resentment between you & your partner.

Prepare & Have an Agenda for Conversation

Like our parents, we also sometimes overextend our planning and lose out on other financial goals. Set aside a clear agenda and see if theirs and your emergency fund is enough. The basics of this conversation should be to know the following:

Long term care insurance – What policies do they have for health, pension etc.

Retirement Funds – Know if they have invested in any long term ELSS, maintaining any liquid funds etc.

Mortgages – Check on their mortgages. It is very important that they have all mortgage free assets as it provides your parents with peace of mind.

Debt – Suggest them to keep a check on debts be it their credit cards, self-help groups or to any members in the family or friends.

Will and Estate Planning–The idea is not to grill your parents on what they plan to leave for you but it is to make sure that they have properly planned for their estate. The simplest and very basic check for the parents in India would be, Is your Mom a nominee on your Dad’s bank account and vice versa?

Check all the Documents – See and make sure that all their documents are in good state, well organized and arranged.

It is understood that the above mentioned things make it very uncomfortable topics to be discussed with parents especially in our country but you can make them understand that it imperative for them to better enjoy their retired life.

Why it is so significant?

Remember, your parents might have been saving for retirement ever since your birth and may be a little after that but the chances are that they must have exhausted a part of all of it in your educational spend, an extra course that you were keen on taking or may be the destination wedding that had become your dream of life. They did so to give you the best and most of the parents want to manage their own expenses always.

Through this you can help them set their Retirement Goals upright and guide them to plan their retired life better. And in case, you find it all the more difficult – speak to your Financial Advisor and seek help as to How you can help your parents through their retired life?

Contact us for any queries or feel free to write us, contact@sbsfin.com

Retirement Planning for the Millennials

Many a times, financial advisors and experts have been found discussing about the rules of retirement. We at SBS Fin, are of firm belief that any person who touches the age of 33 must start planning for retirement and that too above & beyond the regular investments of annual financial goals like Travel, Health, Education, Real Estate etc.

How important is Financial Independence past Retirement?

Financial independence affirms a sense of freedom and individuality where each and every person, regardless of their age, is capable of generating ample income for paying forthcoming expenses. This passive income can be retrieved through savings or investment, real estate assets or general royalties from performed work in the past.

It is important that you start varying your options and integrating your savings and investments by the right time for a better future with financial independence and security.

Also, one should always participate in retirement plans which are employee-sponsored. There are many employers who contribute to the company-sponsored retirement matching plans by matching the employees’ contribution. It is important that you follow a retirement strategy and function organized and formulated.

The ideal age of looking forward to a retirement would be around 65 years of age, which is why it is important that you, as an individual, boost-start the establishment of your financial independence by your mid 30s-40s. Financially independent would sum up an individual to be completely mortgage-free, debt-free, liability-free, with sufficiently accumulated capital that would enable the person to live passively off interest and dividends and secure by all means.

 

Five Reasons to pursue Financial Independence:

 1. Freedom of Choice

Each individual works for a living. By pursuing this method, a person will attain the freedom to live and work on their own terms in the time-phase of retirement. You reach a point in life where you will choose to work than it being a must, financially. This sense of certainty arises with financial independence, which makes it the primary reason to pursue financial independence.

2. Unemployment Insurance

This is one of the key adjuncts of financial independence. If you choose to neglect the benefits of financial independence, then you choose to be dependent on monthly paychecks, causing you to be caught in the vicious circle of insecurity that can make you prone to losing your job, being at mercy of those who trifle out instead of minimal, sufficient amounts of employment insurance, helping you jump all the hoops and grab loopholes.

3. Expenditure & Investments

Whilst adopting the procedures of financial independence, you will not have to curb your expenditure with accordance to your priorities. Extra cash flow can always be invested and spent on increasing productivity. You can invest this cash as capital at risk or give aplenty of time to foster a business idea that helps you propagate financial returns in the forthcoming future.

4. Peace of Mind

Security about the future results in incarnate peace of mind. One can spend hearty time with family, introspect and pursue their passion freely. Be in a semi-retirement phase or a retirement phase, this would help you to work with all your heart and mind. You can run small errands at your own time with no stress on your shoulders.

5. Taxes don’t appear as vexatious

As a worthy and active citizen of the country, you should be aware that tax matters a lot, irrespective of varying incomes. The thin line between being depravedly rich to financially stable differs with the concept of how and where you’re holding your assets. For example, individuals with little wealth generate a good amount of taxable income while those who pursue financial independence generate abeyant gains in the form of real-estate appreciation, hidden capital gains and profits made through tax-free accounts.

 

How to Approach for a Retirement Planning?

Maintain an Emergency Reserve – It is significant to maintain an emergency reserve in the ever vulnerable life situations. One must always have three to six months’ worth of living expenses in the bank account.

Get rid of Debts – One must borrow for Education as you get a tax benefit but at the same time, the debts which our generation and millennials are getting used to of in the form of credit cards must be paid off at the earliest.

Keep aside 10% of your income for Retirement, yes on monthly basis. You can also start and SIP in a mutual fund.

Allow you investments to grow in direct proportion to your income growth. Also keep the income boosters such as tax refund, bonus income, long due payouts as the annual bonus of your investment income.

The thumb rule of investments in retirement planning should be, 100- age = Your allocation to stocks. We can say, at the age of 30 – one should keep 70% of your portfolio in equities. Once retired, you can limit your exposure to stocks to not more than 25-30% of your portfolio.

You must save 25 times your annual expense. Instantly buy a health insurance plan as the difficulty of making such a purchase increases once you are older.

Allocate, Diversify and Rebalance – If you are a risk-taking regular investor, you can also enjoy go with the strategy of allocation with diversification. You need to be vigilant on quarterly basis.

Retirement Planning Habits in a Nutshell:

  • One NEVER stops investing for retirement.
  • In retired life, you are likely to spend the same amount as today.
  • The best time to start saving and investing for retirement is with your first job or first post-high-school or post-college job. But if you haven’t started yet, then right now is the right time.
  • The Retirement Corpus shall not be used for things other than your retirement.
  • For the retirement accounts – Set it and forget it.

 Henceforth, it is important that you realize that there is simply nobody who would guarantee you the security, financial independence and lifestyle you want at your millennial stage of life, except yourself.

Contact us for  any queries regarding  Financial Planning for Millennials feel free to write us, contact@sbsfin.com