Know your financial moves for your 50's

Your 50’s can be a time of transition – your kids may be starting university or moving out, your earning power has increased, your mortgage may be paid off and you are beginning to think about retirement more than ever.

Carefully planning the financial aspects of your retirement can increase the chances that you will have the resources to sustain yourself during your retirement years. Any good financial plan should take into account both your anticipated income and your expected expenses.

Assess your goals for your retirement pursuits. Seek the assistance of counselors if you need help clarifying your values and interests. Depending on how you plan to spend your retirement years, the cost of these activities can raise the amount of money you need to have saved for retirement significantly.

Are you finding difficulty on investing or financial planning ? Seek advice of a financial planner who will make ease for you .Just leave a missed call @022 62116588 and have a personalised financial planner for FREE. MoneyMindz provides Free Financial Advisory, Financial Investment Services, Financial Planning, Certified Financial Planner Assistance, Retirement Planning Advisory, Free Financial Advisors, Online Personal Finance, On-call Investment Management, Best Financial Planner, CFP India, Personal Financial Planning.

It is also essential when you think about retiring that you have interests and hobbies you’d like to pursue. When you stop working, you obtain significant amounts of time back. For example, a friend who is a successful business owner with many employees looks forward to his retirement when he will have more time to bake bread, practice photography, read, watch silly YouTube videos and target shoot.

Track your current living expenses. Get a realistic picture of what you'll need in retirement by monitoring what you spend today. Factor in any decreases in expenses you will experience such as the costs of commuting, your work wardrobe, and any other job-related expenses.

At the same time, don’t become cost foolish. You will want to plan for additional expenses for travel, eating out, hobbies, athletic activities and other retirement interests and pursuits as well as any healthcare coverage.

Go for tax efficiency. Try to maximize your registered retirement savings plan, tax-free savings account and (if available) voluntary contributions to a workplace pension plan. Also remember that earning dividends and capital gains in non-registered plans will keep more money in your pocket than interest income.

Adjust your portfolio. As you near retirement, consider allocating more of your assets towards investments that provide safety and capital preservation, while maintaining some growth-oriented investments to help meet your long-term #financial goals. Your advisor will help you find the right mix for you.

Assess your insurance needs. From disability and critical insurance to business and life insurance, think about protecting what’s valuable to you and your family. What coverage do you need? How much? Also start thinking about future long-term care and how you’ll fund it.

Postal life insurance for government employees

If you are a government employee, it would not be wrong to say that as a significant perk, you can go for Postal Life Insurance i.e. PLI. When it comes to PLI, it covers many departments of the State as well as Central governments, public sector undertakings, financial institutions, nationalised banks and so on. Thus, being a government employee, you can avail this insurance at much lower rates as compared to those of private insurance companies.

What is a Postal Life Insurance(PLI)?

When it comes to Postal Life Insurance PLI, it was initiated in 1884, and is presently handled by the Department of Posts that comes under Government of India. It was initially started as a way of ensuring the welfare of the government employees which has now grown by leaps and bounds.

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What are the various policies offered by PLI?

In postal life insurance, you have seven plain vanilla insurance plans that include:

Whole Life Assurance (SURAKSHA)

According to this plan, the amount of the #insurance along with its bonus is to be paid to the nominee or legal heir, followed by the death of the insured person.

Joint Life Assurance (YUGAL SURAKSHA)

When it comes to this insurance policy, it insures both the spouses under this single cover. Moreover, it will also extended to the family member, and if either of the spouse is a government employee, this particular policy can easily be availed. Not only this, another perk of this policy is the fact that it requires the payment of only just a single premium for both.

Endowment Assurance (SANTOSH)

According to this endowment policy, the sum assured along with the bonus is liable for the payment at the pre-determined age of the maturity. However, after the unfortunate demise of the policy holder, the nominee will get the sum assured.

Convertible Whole Life Assurance (SUVIDHA)

Well, this insurance policy offers you with the provision of being changed into an endowment assurance plan once this policy completes five years.

Anticipated Endowment Assurance (SUMANGAL)

This insurance policy provides you with the periodical returns and is basically a money-back policy. In fact, the maximum sum-assured you will get in this policy is Rs. 5 lakh.

Children Policy

It is an extented policy for the children of the government employees. Moreover, it can be taken on either the sum assured of the policy holder or Rs. 1 lakh, well whichever is lower.

Insurance for the Disabled

Postal Life Insurance also extends insurance to the disabled persons upon a medical examination that helps deciding on the premium to be paid.

What are the Benefits of Availing Postal Life Insurance?

However, as these types of insurance policies are yet to gain the prominence, even though it offers plethora of benefits which make them attractive. Some benefits are listed below

• Postal Life Insurance investments are liable for the tax benefits just like other life insurance policies.

• They provide you with the coverage with immediate effect.

• They give you the ease of transfer from anywhere across India.

• The conversions are quite easy from a whole life insurance to an endowment assurance.

• Loans can easily be availed on endowment assurance policy with the effective completion of three years of the plan.

• The delay in a month's premium will lead towards the fine of Re1 upon every Rs.100 of the sum assured.

How to act quickly before any uncertainties?

Your health is your asset. Have you ever thought of covering it. You never know what will happen in very next moment. Life is full of uncertainties. Getting hurt or sick isn’t something a person wants to happen, but unexpected medical events do occur. Having a health insurance plan helps pay for some of those unexpected costs, and provides financial protection against ongoing large medical bills 

Here is some advantages of health insurance 

1. Increase in the incidence of lifestyle-related illnesses

Life expectancy has increased.Thanks to advancement in medicines, the average man is likely to live for around 84 years by 2040. And so has stress due to sedentary lifestyle.

This has also given rise to the early onset of chronic diseases like cancer, lung conditions and stroke, claiming younger lives. Health insurance mitigates the financial risk that may befall a person irrespective of age.

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2. Health insurance coverage is more than just hospitalization

Most/Many health insurance plans give coverage for day care procedures and OPD, other than the treatments that involve serious hospitalization. There are also health plans that cover vector borne diseases like dengue.

3. Increase in out-of-pocket expenses

With the healthcare industry in India witnessing double-digit inflation, it is getting extremely expensive to treat common ailments in India. As a result, this has put a dent in an individual’s pocket.

Buying health insurance can double up as your emergency financial fund while preparing you for the troubled times.

4. Your group health cover may not be sufficient

A group health plan may or may not cover all your family members. The sum insured limit in a group plan is also less, which may not be enough to meet all the medical expenses incurred.

And then as you’ll grow older, you might need frequent medical attention. Before that you may not want to put yourself at the risk of being under-insured.

5. Benefits buying health insurance at young

Buying a personal health insurance policy is cost-efficient while one is young and free from medical complications. The premium is lower and the policy offers comprehensive coverage in comparison to a policy purchased at an older age. As an individual grows older, the cost of the cover increases and if one develops health issues, the health insurance company tends to exclude pre-existing conditions which defeat the whole purpose of buying a health insurance. Most health insurance companies have an upper age limit for the policies, which means one would have limited options after retirement. One can enjoy the benefits of cumulative bonus in the form of no claim benefit if they renew the policy without any claims.

6. Tax benefit

The icing on the cake by opting for a personal health insurance policy is the tax benefit. Payments made towards health insurance premiums are eligible for tax deductions under section 80D of the Indian Income Tax Act. Individuals less than 65 years of age can claim a deduction of up to Rs. 15,000 for the health insurance premium paid for themselves, or for their spouse, children or parents.

Stock market risk-free Tips for beginners

Like many new investors, you may also decide to invest in a company and pick up your first shares of stock, but your limited knowledge leaves you wondering how to actually do it. Don't worry! First With the money that you could have invested, I suggest buying a few books about investing, finance, economy, or whatever you think might be important.

You should also check out websites like Moneymindz.com and you refer our blogs. Moneymindz.com is a huge repository of information with a ton of guides and concise definitions. Definitely get into that - how to invest in stocks. To be more specific, for you new investors out there, this page was put together to serve as an introductory depository of investment articles designed to get many of the basics out of the way before moving on to some of the more advanced topics which I've written over the past years

If you have no experience, you should buy a few shares of a company that you think has a good business model, will grow over time, and maybe has resistant to the economy. Since you have so few shares, the profits & losses don’t matter at all - so just watch how the stock moves throughout the day and how the company’s competitors are doing.

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Here are some tips –

Save yourself from yourself

Inexperienced investors simply don't have the knowledge, emotional discipline or time to navigate the complex and often volatile world of stocks. New investors usually generate terrible returns because they make a huge amount of easily avoidable mistakes. By offering beginners a hands off #investing experience, Moneymindz -advisors enable you to sit back . Help you to they take the emotion out of investing and save you from one of the biggest obstacles standing in your way. You!

Don’t get confused with financial jargon 

There is a particularly poignant scene in the movie English Vinglish where Shashi Godbole (the every woman character played by Sridevi) attempts to order food at a New York cafe and ends up running away in tears.

To me, this encounter is illustrative of the wide chasm between investors and the investment management industry which speaks a different language from its customers. This creates undue stress, leads to poor investment decisions and, more often than not, frightens away prospective investors

Before investing investors should try to learn the financial jargon.

Hold Diversified Portfolio:

An investor can be able to minimize the risk associated with the stock trading by holding a diversified stocks in their portfolio. One can diversify their portfolio in many ways like holding stocks of companies operating in different industries so that even if one industry is down performing other stocks in the portfolio will not be affected.

Understand Your Risk Tolerance

Risk tolerance is a psychological trait that is genetically based, but positively influenced by education, income, and wealth (as these increase, risk tolerance appears to increase slightly) and negatively by age (as one gets older, risk tolerance decreases). Your risk tolerance is how you feel about risk and the degree of anxiety you feel when risk is present. In psychological terms, risk tolerance is defined as “the extent to which a person chooses to risk experiencing a less favorable outcome in the pursuit of a more favorable outcome.” In other words, would you risk $100 to win $1,000? Or $1,000 to win $1,000? All humans vary in their risk tolerance, and there is no “right” balance.

Do you want learn Investing like captain cool?

Ms Dhoni who have captained Indian Team for nine years Mahendra Singh Dhoni, who captained India in limited overs cricket for nine long years, has stepped down. "Captain Cool" as he was popularly known gives way to a new generation of players to be led by a brash, young Virat Kohli, who's waited in the wings for a while.

He has the most wins by an Indian captain in both tests and one day internationals. Among other laurels, he led India to victory in the 2007 ICC World Twenty20, the 2011 ICC Cricket World Cup and the 2013 ICC Champions Trophy. In 2009 the Indian team rose to be number one in tests for the first time.

Dhoni’s journey to greatness requires the usual facets we associate with greatness: having belief in one’s ideas and control over one’s mind, having discipline, being able to work astronomically hard, and above all, having the stamina and patience to overcome challenges and go the distance.

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We can learn from MS Dhoni to be Cool –

Dhoni is famously known as captain cool. A calm temperament is a great asset in the field of investment as well. When the markets tank, most investors lose sleep as they see the value of their portfolios shrink. Warren Buffett has said that you should be greedy when others are fearful and fearful when others are greedy. In a bear market, investors should be able to coolly evaluate which high-quality stocks have become available at a bargain and snap them up. Instead, most of them are either unable to invest more in equities, or worse still, sell their equity holdings altogether.

He is the coach and the advisor to the youngster –

There are many people in our life who have help us to walk and cross all the hurdles in our life. We always remember them in our life and cherish those lovely memories.

In Dhoni’s Life His family, Friends especially his father supported him to shape his career as a cricketer. 

How can one forget his coach who passionately trained him and whose joy knew no bounds when he left his wife standing in the middle of the bazaar to convey the news of selection to M S Dhoni.

In personal finance too, your financial adviser acts in a fiduciary manner to make sure you are on track to reach your financial goals. Financial adviser acts independently without any bias to make sure the client’s best are interests are served always. Independently without any bias to make sure the client’s best are interests are served always.

Calculated bets

Dhoni does take risks but they are well-calculated ones. He does not have a reckless, all-or-nothing approach. This is reflected in the composition of the teams that he fields. Depending on the sort of pitch that the team will play on, he may take an extra spinner or an extra pace bowler. But he rarely goes with an all-pace or all-spin attack.

An investor too should make calculated bets. Warren Buffett and his partner Charlie Munger often give the analogy that they have mastered the art of vaulting over small obstacles rather than very high ones.

For instance, a typical investor may have an 8 – 12 per cent or 5 – 10 per cent strategic allocation to gold in a long-term portfolio. He may tactically shift his weightage depending on the performance of the asset class, moving to the upper end of that range when the asset class is performing badly [buy low] and to the lower end when it is performing well.

The Finisher 

More specifically, his skills as a finisher. In his heyday, Dhoni was one of the best finishers in the limited-overs game, even sending yorker-length deliveries for six with his signature ‘helicopter shot’. But even Dhoni’s tried and tested ‘safety first and attack later’ approach was getting outdated, given how the limited-overs game has evolved in such a short time. Batsmen nowadays are not always allowed the luxury of consuming too many deliveries to get set, before attacking.

In recent instance MS Dhoni, the finisher with a Midas touch, was back in his elements for Rising Pune Supergiant (RPS) against Sunrisers Hyderabad (SRH) in an Indian Premier League (IPL) 2017 match.

MS Dhoni hit a 34-ball 61 not out to help his team cross the finish line in the last over. Chasing 177 to win, RPS lost a couple of quick wickets to get reduced to 98 for three. But Dhoni ensured that his team finish with a win, despite needing 47 off the last three overs.

MS Dhoni clinched the last-ball thriller with an imperious cover drive and the entire Pune dug-out, including skipper Steve Smith, gave him a standing ovation.

As you get closer to your goal—say when you are five years away from retirement—you need to reduce the risk in your investment and move a larger portion to fixed-income assets, so that a downturn in the equity market does not affect your retirement plans.

Tips for ideal debutant who wants to invest in mutual Fund?

Timing the entry is crucial in mutual fund. If you get it wrong, the situation can be salvaged by exiting at the right time. However, wrong fund selection, especially by those making their first mutual fund investment, can lead to losses that can put them off mutual funds forever.

What should be your first mutual fund investment? The answer is different for different investors and depends on their age, financial goals, risk-taking capacity, etc.

When it comes to mutual fund investment a lot of people are aware of it, yet do not know how and what they exactly mean or what they do.

What is a mutual fund?

Mutual Fund is a kind of investment vehicle that pools people’s money and invests in various money market instruments like stocks or shares of companies, government bonds, commodities etc. It is basically a trust, which takes care of the funds or money that its members put in, in this case, yours the investor’s money.

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In simple words, if today as an investor you do not have the funds to buy shares of 5 different companies together, or you do not understand the markets much and when to enter and exit the markets and what companies to invest in and when to get out of it; then mutual funds do that for you. 

Example of how Mutual fund companies work for you

It is like when one friend doesn’t have money to order a pizza or does not know what the different toppings like jalapenos and paprika or olives would taste, other friends also pool in money for a large pizza and ask the chef to suggest the best and place the order, thus all get a slice each and most likely will have a good tasting pizza. 

Mutual funds follow the same approach, wherein the other friends pooling in money here are different investors from all over the country and the chef is the financial expert knows as Fund Manager, handling your investments on behalf of the mutual fund house to make sure your investment pizza is pan fresh and you get good returns as well.

Great you are starting early. 

Don't  look at absolute amounts. Look at percentages.

Ex: If you invest Rs.1000, a gain of Rs.100 is small but in terms of percentage its 10% which is very good. So dont look at returns in absolute.

You have the time by your side, if you can postpone your expenses & save a little more today you will have a large corpus at the end of 2/3 decades.

Remember Compound Interest is the eighth wonder of this world. A wonder that can affect our lives unlike the other 7. Get it working for you!

Start early but dont be childish about your investments. Dont think of spending/skipping small quantum for investing. Dont waste them on people who come and TIP you on the next big idea. I am sure you know Warren Buffett, he is the 2nd richest man in the world and he has generated a return of 20% over the years on this portfolio. So be careful in where you invest.

Keep increasing your investment amount every year as your income grows. Keep a target of atleast 15% hike in investment each year.

Choose good mutual funds with long track records & stable fund house. Dont run behind recent performances or ratings. Look for stable long term returns.

No Exit Load.There are two types of loads (charges) , investor has to pay while investing in mutual funds – Entry load and Exit load. Entry load is to be paid at the time of entering the mutual fund investment. In India, it has been abolished by SEBI since last few years. 

Exit load, on the other hand is to be paid at time of the redemption of the mutual fund investment if the redemption is before stipulated period of time. Some mutual funds have come up with the idea of abolishing the exit load totally on their products which will help the investors to get back their investment any time in case of urgency without paying in exit load. In other words, there will not be any lock-in period for such schemes.

Do Child insurance plans are worthy?

Child Insurance Solutions are insurance plans that take care of your Protection and Savings needs for securing the future of your children. As a parent, one of your most important goals would be to make sure that your children have a bright future and lead their lives comfortably. These solutions can help you achieve that by saving for your children’s higher education at a prestigious university.

Why Child Insurance is important?

1: The time and resources to grieve.

There is likely nothing more devastating than the loss of a child. In such an unfortunate and untimely event, day-to-day responsibilities might be overwhelming - the demands of your job, paying the bills, and having to care for other children in the household. The reality is you might not have enough paid sick or vacation time from work to take care of yourself, your spouse or your other children during this difficult time. If the unthinkable were to happen, would you have done enough financial planning to have the resources to go 

back to work on your terms?

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2: Cash Value and living benefits.

The cash value earned from a permanent life policy (such as whole life, universal and variable life) can be withdrawn or borrowed against, providing living benefits that can used by your child as he or she gets older for many things such as:

· College tuition and expenses

· Financing a vehicle

· Paying for a wedding

· Collateral for loans

3: They'll always be insured.

There are a number of factors that can affect your child's future insurability. High blood pressure, diabetes, obesity and cancer are just a few of the many health complications that might prevent your child from being insured down the road. One of the primary benefits of purchasing a life insurance policy when they are young is that they will always be covered regardless of their future health as long as premiums are being paid.

4: Guaranteed insurability:

Some life insurance policies for children come with an optional guaranteed insurability rider/endorsement that may available for a nominal cost. As your child grows into an adult, this rider allows you to buy additional life insurance above the face value of the current policy (on specific dates and in certain increments) regardless of his/her health status at the time. Usually, the older the child gets, the fewer dates the policy owner has to purchase more life insurance and in some instances, after a certain age, the rider may not be exercised.

5: A locked-in rate.

Life insurance premiums for minors can be very affordable. Buying life insurance for your child now could give you an opportunity to lock in that rate for the life of the policy. As long as the required premium is paid, the policy will stay in force.

Policies vary greatly from company to company. A life insurance professional can help you select the right policy type and optional policy riders so your child will get the most out of their policy - even when he or she is grown with a family of their own.

Are you new to investing?DO you want to know some order in investing?

Learn the bare minimum to understand the different possibilities you have to invest. This means Educating yourself by reading a book or reading various financial blogs.

Secure 6 months first.

The future is always uncertain, but having the next six months taken care of is highly reassuring. Being prepared for any short-term hiccups, in our careers and lives, is pretty important.

Start with the familiar. 

An easy way to get into the stock market is by buying things that you’re familiar with and know. If you drink a beloved green tea latte every day, buy Starbucks shares. “If you want to get your feet wet and try it out, buying Apple shares because you own the iPhone, the iPad, the iThis and iThat is a great strategy,” Mr. Small says. “But you have to separate that from more serious investing. If you are someone who is in their early 30s, you’re looking to perhaps buy a house…You want to invest more for the long-term where you’re investing with a certain goal in mind.”

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Learn Where to Invest Your Money

George Papadopoulos — a certified public accountant, certified financial planner and fee-only wealth manager in Michigan — offered this advice on where beginners should invest:

“For beginner investors who are most likely investing in just one account — usually the 401k plan at work — and not willing to spend time managing and rebalancing, they should just pick a target-date fund and ‘set it and forget it.’ Further, new investors should focus on expanding their marketable skills and aim to contribute more — ideally, to the point to capture the full matching — to their workplace retirement account.”

Diversify. 

Mutual funds and exchange-traded funds tend to be good products for young individuals who don’t have enough assets to create their own diversified portfolio. “The best way to describe mutual funds is it’s a basket of investments. Everybody puts any amount of money they want into this basket.

They try to deviate you elsewhere, bankers want to squeeze fees from you. So, stick to your decision. That means if you want small cap equities, you will invest in small cap equities and nothing else that they recommend (always look for names like shares, vanguard, S&P. This way you avoid branded ETF's or investment funds.

Don’t Use the TV as Your Investment Guide

So many investors believe that in order to prevail, they must monitor all of the financial market news and heed the advice of business television commentators. Seek for proper financial advisory.

Why Endowment Insurance Plans Needed?

Endowment plans provide a disciplined way of saving cash for destiny economic desires. An introduced benefit is the lifestyles hazard cover which could be of outstanding assist to the own family if something untoward happens to the primary bread winner. The returns can be decrease, however they're frequently chance unfastened in case of guaranteed sum assured. Tax blessings, difficulty to sure situations, are also available on those returns.

This explains why endowment plans are desired by chance-averse traders as besides supplying cowl to an person's existence in case of an eventuality, in addition they give the maturity amount to the policyholder if he survives the policy.

Seek an expert advice from India’s Best financial advisory like MoneyMindz.com Know. How and when to avail loans without disturbing any other financial goals of life. A complete financial planning is needed to make a decision on any money-related matter, including loans. .Just leave a missed call @022 62116588 or Visit moneymindz.com. 

Guaranteed returns: These plans ensure that a stipulated amount is paid at the end of the term. If the policyholder lives until the maturity, he/she is given the assured amount. However, in case of the death of the insured, the amount is transferred to the nominee.

Things to remember: It is advisable to take the endowment plan for a minimum period of 15-20 years. The amount policy holder receives at the time of maturity is directly related to the number of years of accumulation.

Twin Benefit:

You get insurance + savings benefit. You get the money you invest with returns and also a periodic bonus at the maturity of the plan

Combination of insurance and investment:

An endowment policy is a combination of insurance and investment: The life of the individual taking the policy is insured for a certain amount. This life cover is referred to as the sum assured.

A certain part of the premium gets allocated towards this sum assured. Some portion of the premium is allocated towards the administrative expenses of the insurance company selling the policy. The remaining portion of the premium gets invested.

Additional Bonus

An endowment policy may declare a bonus every year The money that is invested generates a certain return every year. This return may be declared as a bonus. The bonus is typically generated as a certain proportion of sum assured or life cover as it is popularly known.

The bonus declared is not payable immediately:

Like is the case with a stock dividend or a mutual fund dividend which is payable immediately after it is declared, the bonus declared accumulates and is payable only when the policy matures or in case the policy holder dies.

Tops things to consider before availing personal Loan

A personal loan is an unsecured loan which can come in very handy during the times of need. It has the potential to rescue you out of an immediate financial requirements. This is because it gets processed quickly and the amount is transferred into your bank account, thus enabling you to meet your financial requirements.

Right Time and Right Reason

The first thing to do is to analyze your current and future financial status. Analyze the reason for availing the loan. If it is not for an immediate need, just postpone. If the reason is valid and needed, check for the right time to avail it. Monthly EMIs should neither become a burden nor disturb your regular commitments. In short, a personal loan has to be availed only for a valid reason and at the right time to avoid unnecessary financial stress. After all, a loan should be a tool to solve your financial issue, not create one!

Seek an expert advice from India’s Best financial advisor like MoneyMindz.com  Know. How and when to avail loans without disturbing any other financial goals of life. A complete financial planning is needed to make a decision on any money-related matter, including loans. .Just leave a missed call @022 62116588 or Visit moneyMindz.com.

Interest Rates: 

As personal loans are unsecured, they attract a very high interest rate. This is because you need not keep any asset as collateral. This also does not give the lender any guarantee of receiving the amount back. Hence, the nature of this loan also makes it that much more difficult to obtain as compared to getting a secured loan disbursed into your account. You may either apply for a fixed rate or a variable rate when it comes to choosing the type of loan.

Read loan agreement details carefully: You should always read the loan document in its entirety, including the fine print to know all the charges, fees and penalties for non repayment. This will help you not to be caught off-guard later. Do not rely blindly on the bank relationship manager who might not make you aware of some important details.

Penalty Charges: 

In case you are not able to pay your dues on time, there is generally a very heavy penalty that is charged on your loan account. You should find out about the exact details regarding the penalty that may get levied in case of any such circumstance arising in the future. You want to ensure the affordability factor of the loan right from the beginning.

Credit History: 

Before applying for the loan, you should check your credit score in order to know the likely prospects of getting the loan sanctioned. Most importantly, if there are any pending credit card dues, then you should immediately pay them off as this will reflect in your credit history while your application is getting processed.

Know the process of deferment:

This would come handy in case you have a temporary cash crunch leading to inability in meeting repayment obligations. While the going may be good when you decided to access the loan, there is always the possibility of things going wrong in future. A loss of job or another emergency can create short-term cash crunch and inability to meet payment obligations. You should be aware of how to handle such a situation at the time of accessing the loan.

Think of the consequences of not being able to repay loan in time:

Loan default can have serious consequence. Being aware of the consequences can itself make you a disciplined borrower and help you work within your means.

Remember defaults can mess up your long-term credit score too: 

Besides brush with the authorities and courts, defaults will also have a negative impact on your credit score. Even if you are later able to service the present loan successfully, your ability to access loans at a future date may be severely curtailed as your credit history would reflect the previous defaults. A clean credit history can also help in negotiating cheaper interest rates later.

Why proper financial planning is required?

The first thing we have to keep in mind that “We should be True To our self And Keep a Simple.”

Even though death and taxes are the only guarantees in life, a proper investment plan should drastically improve your odds of long-term success. However, it is unlikely that you will stick to your plan unless it fits your personality and you truly believe in it. Some investors consider the term “trader” a four-letter word. It’s just not in their DNA to actively trade their investment capital. On the other hand, some investors classify a position that they hold overnight as “long-term.” There are no right or wrong answers when it comes to one’s investment beliefs and investment plans will be as unique as the investors themselves. That said, your plan should only include strategies and time frames that you are comfortable executing. Be honest with yourself!

Financial planning helps you determine your short and long-term financial goals and create a balanced plan to meet those goals.

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The right investment should satisfy the following basic principles of investments: 

1. Safety 

2. Liquidity

 3. Risk level 

4. Transparency 

5. Return on investment

 

6. Exit route

Investment Planning also helps you to decide upon the right investment strategy. Besides your individual requirement, your investment strategy would also depend upon your age, personal circumstances and your risk appetite. These aspects are typically taken care of during investment planning. Investment Planning further helps you to strike a balance between risk and returns. By prudent planning, it is possible to arrive at an optimal mix of risk and returns, which suits your particular needs and requirements.

Apart from financial goals, the most important thing in financial-planning is investment plan. An investment plan is important because it creates a framework for every investment activity in which you will participate. It states what you will invest in, how you will invest, why you will invest, what percentage of your money you will invest, and so on. In short, your investment plan significantly affects your investment returns. Frame a investment plan well and then follow it carefully. Your investment plan is a detailed description of all the major components of your investment strategy. It will help you to do the following:Represent yourself. It explains your personal investment characteristics, such as your risk tolerance and your personal constraints, and how those relate to your asset allocation and targets.

Articulate what you will and will not do. This plan clearly states what you will and will not invest in and how you will invest, and also includes investment guidelines that will help you invest your money wisely and achieve your goals.

Provide an investment framework and guidelines for making wise investment choices. If you clearly think through and plan how you will invest now that you have few assets (and are not influenced by "fear and greed"), it will give you an investment framework and guidelines to help you reason through decisions which could have a major impact on future financial goals and retirement. If followed carefully, it will help you avoid poor investment decisions that could have major repercussions for your financial life, but only if you follow the plan.

You can place yourself in a great position, if you frame a good financial plan. It is normal and human to become isolated and depressed when we see our investments going down and there seems to be no answer. No matter, with all that is going on with the economy, there is always opportunity's in the #investment world. Even if the market is going up, down, or sideways, there is always money to be made.