All of us have some dreams in life - whether it is buying a new house, starting a new business, investing your hard-earned money in stocks, traveling the world or planning your family’s future. All these can be termed as financial goals as along with emotions, it also has a monetary value. Financial awareness therefore becomes a vital ingredient to effectively plan the above. Being aware of your requirements early in life leads to better financial planning, and helps you determine your short and long-term goals.
COVID-19 has impacted every sector across the world, and with the economy being significantly hit, it is imperative for us to select the right investments at the right time. As a financial services company, we offer our customers an array of options ranging from Mutual Funds, Life, General & Health Insurance, ULIPs & Pension Funds, Portfolio Management Services, Stocks, Securities and much more.
Growing importance
Financial education is getting increasingly important not only for a businessman or an investor but also for a salaried employee who is trying to decide how to balance his budget, fund his child’s education or ensure an income when the parents retire.
Different reasons for different seasons
A financial plan of an individual should be customised to meet one's individual needs at different stages of life and it is important to have a balanced mix of instruments to address the various needs of protection, savings and wealth creation. But how would you plan this?
It is just not about tax planning or investments, but it is a more comprehensive exercise. It includes reviewing your existing funds, planning for your contingency requirement, planning for your insurance requirement, building an investment portfolio that suits your risk appetite and much more!
It is imperative for every individual (HNI or otherwise) to buy a term plan for an amount that can be considered reasonable given their lifestyle, income, expenses and contingent expenses among others. From an investment perspective, mutual funds can play an important role in the client’s portfolio. Mutual funds give investors an opportunity to access equity and debt markets in a convenient manner. If the individual is a risktaker, then stock market is the place for them.
If we were to compare a mutual fund with a ULIP, MFs are more cost-effective. The annual expenses incurred on a ULIP are much higher including recurring and fund management fees, as compared to an MF which are managed at around 2.5% of net assets. If the person decides to go for insurance, he/she should start with a basic term plan as mentioned above.
What you need to keep in mind?
The first step towards financial planning would be to identify your needs and goals. This will lead to the second step of determining the total capital requirement. After estimating the requirements, the next step will be to decide how you will raise the money. However, what you need to keep in mind is that it is not only about raising funds, but it is also important to make a long term, informed investment decision, which is where our variety of products will help you take an informed decision.
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