Smartly balancing today’s and tomorrow’s requirements with the help of a sound financial plan holds the key to creating ample wealth for future needs.
Home and work, quality time between own parents and in-laws, affection for children, the list items in your life that require balancing acts is a long one. In that list features another item relating to the balancing of financial needs of today and tomorrow. While you need to meet essential expenses like transport to work, monthly grocery and utility bills, there are also recreational expenses like going to the movie and dining out. At the same time, you need to save enough for the future to buy a home, children’s higher education and retirement. So, how do you enjoy the present even as you secure your future? The answer to the question lies in understanding the wealth creation process.
Wealth creation needs regular savings which has to be invested well to create ample wealth for future needs. The issue is how do you maintain this constant supply of savings to your wealth creation factory? Here is a thought most financial experts echo. “To create wealth, one has to invert the traditional thinking that savings should be done after meeting all the expenses. On the contrary, expenses should be met after adequate money has been saved on a monthly basis,” says Rajesh Iyer, CEO, DHFL Pramerica Mutual Fund. But what is the rationale behind this approach? “Saving alone is not enough for wealth creation. Money needs to be invested systematically in assets like equities and equity mutual funds that beat inflation over the long term. For wealth creation, one needs to stay invested for a reasonably the long time,” adds Iyer. Just in case you think that’s a big ask, Sampath Reddy, chief investment officer, Bajaj Allianz Life Insurance has some handy tips for you.
Income, expenses and financial goals
Esta historia es de la edición July 02, 2018 de Outlook.
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Esta historia es de la edición July 02, 2018 de Outlook.
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