IT'S that time of the year when people make resolutions for the next year. With the last month of year 2010 nearing its end
I will differentiate between savings and investing:
The first step towards wealth creation is saving out of your monthly income. The second step is investing from your savings. Normally, people confuse saving with investing. For example, some people claim to have invested their retirement funds in one-year bank fixed deposits. But actually, they have not 'invested' their surplus money.
They have simply saved the surplus money and parked it in a bank deposit where returns will not normally match the inflation rate." So, it is very important to differentiate saving from investing and analyse various investment options. Set aside 20 per cent to 25 per cent of your income aside as savings. Next, try to invest a 'portion' of the savings into investment products.
I will plan my finances:
Most aspire to lead a wealthy financial life. However, just leading a wealthy financial life without it being healthy is like aspiring to become obsess. Dedicate the next year just to streamline your financial health. Ensure your financial goal sheet is updated. Put together a family budget and streamline you financial administration. Ensure all your investment, insurance, property, income-tax, loan, credit card, bank statements and statements and salary slips, among others, are stored properly. Nobody ever becomes wealthy by earning a lot of money, people become wealthy only by keeping and managing money correctly.
I will find my credit history:
Many people, while applying for loans, discover that their credit report is not what they had thought. Credit Information Bureau India vi (CIBIL) is in the process of making credit reports available to consumers through a fully-automated system. A CIR request form, identity proof and address proof along with a nominal fee is all that is required to know one's credit report.
This will enable an individual direct access to their credit information reports on line. This solution will have world-class features that will allow banks to respond to errors and disputes via an online maintenance tool with the capability to amend the credit information online.
If one want to get errors rectified, she needs to contact the credit grantor, from whom she has availed the loan, and request the necessary changes.
I will alter goals as per my risk profile:
MFs, insurance, stocks, bonds, gold or commodities each have a fit in ones' lives. However, households in India are taking time to accept these products. Before one jumps in, its important to know the goal of investment and your risk-appetite.
Knowing yourself is important. You need to understand what suits your style and what does not. Younger investors should take more exposure in risk assets (equities. He asks investors, irrespective of age, to bracket themselves in conservative, moderate or aggressive risk appetite profile. Do you want to endanger all your capital if returns match the risk?
I will plan for sunset years: From a long-term perspective, buying insurance products when you are young has various benefits. The same principle is also applicable when planning your retirement. Pension plans ensure that your income continues after retirement. The key here is to initiate a retirement plan at a younger age as it will involve a lower cost. The money that you receive at vesting from a plan can be used to buy an immediate annuity plan.
