Five Financial Wheels to enrich your life
On Personal Finance, one can seek the advice of others and can get the help of Financial Advisors. But, we ourselves only know the real Financial needs. Financial Planning is not as difficult as we think, nor is it for Rich People. Decision making is the important one, while playing in the thing of Personal Finance.
Many of us who are not even able to complete their School education, are becoming Good businessmen and getting Financial Independence. No one has taught them to become Rich, the decision on Financial Planning made them like Rich. Spending habit is the key factor when it comes to Financial Independence.
These Five amazing Financial wheels that anyone can familiar with, to enrich the present life.
- Budget Planning
- Financial Goal Planning
- Investment Planning
- Retirement Planning
- Estate Planning
You can call and read it as, B-FIRE stands by the first letter. It is advisable to keep the Budget Planning for the Individual and Family on a daily basis. The First wheel tells you about how the earnings (Income) are receiving and where the expenses (Spending) are going. So, keep track of your daily income and expenses.
Having a dream of Financial goals alone does not fulfill it. Rather it is necessary to calculate the value for the Goals accurately. One must find out about the Goal duration and Inflation rate in the long term.
By compiling all the details for the Financial Goal(s), we must clearly calculate the future value (Goal Maturity Value) by the today’s value. Inflation, Expected rate of returns and Risk management are the important things while preparing for the Financial Goal Planning.
Don’t choose a risky investment product for your Short term needs and It’s also not good to pick safe and low return investment avenues for the Long term Goals. Those with long term needs should follow the diversification of the so called Asset Allocation.
Your retirement savings is more important than your Child’s Education. We can temporarily adjust our regular expenses and not spending much for our Children’s Education. But, no one cares about your retirement life, except you. It is essential to calculate the Retirement needs and invest accordingly. There should be a plan for the Retirement without any complication and compromise.
It is important to appoint heirs and nominees for your Financial and Physical Assets. It is best to work with Family members on Financial matters, to avoid any conflict in the future. Will, Transfer of Property, Power of Attorney and any family settlement in a time is necessary for the Estate Planning.
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