Financial Planning in 2019
Financial Planning in 2019
Money. Success. Happiness.
New year resolutions can begin with these points to think, plan and then act.If you are looking at similar ideas, to kickstart your new year, then this blog is for you.
Let’s look at the top seven things to do to start your new year in a positive mood and with high energy.
I) Volatility in election Year:
Since the general elections are due in May 2019, the financial markets are going to be volatile.
Here are a few things to keep in mind:
A) Do not invest in a lump sum mode in equity markets like shares, equity mutual funds. Invest in debt mutual funds. Then do STP (systematic transfer plan) into equity mutual funds. Over six months, say from January to June 2019.
B) Markets may see further drops from January to June. Don't fear this market volatility!
C) So, start SIP (Systematic Investment plans) from January. This will give you the benefit of rupee cost averaging.
D) Do not be afraid of dips in the market. Embrace it. Be prepared to keep investing. for 10-12 years to see this effective average year to year return of 12-17 (CAGR)
E) Consult an expert to know more.
You should have first confidence in yourself. Trust in your money and your financial planner. Your guide can make this journey of 2019 more comfortable & assuring. Without such assurance, fear of drops, may not be motivating.
III) Mutual funds
When qualified experts check, analyse & then invest in stock markets. Mutual funds help you. Since these 'fund managers’ do understand the volatility of the stock market. You can rest assured of safer investments. So, in 2019, invest in SIP every month and make it a good habit as part of your new year resolution. Invest in direct online mutual funds. Take the help of a SEBI registered investment advisor (RIA). It will help you in many ways. Unbiased opinion, transparency and guidance in 'fiduciary' capacity, are those unique ways.
So, make 2019 a year of systematic investments. Keep each goal of your financial life in mind while investing.
IV) Real Estate: what returns people have got the last ten years, will not come, in the next ten years.
My suggestion is to avoid investing in real estate. Instead, choose other alternative investment opportunities like mutual funds.
V) Good Loans, Bad Loans: There are good beans. There are bad loans. And which to ones take and which ones to avoid?
Good loans: 8-9% interest rate loans are good for buying your own house.
Education loan at 12% if you have the full money. But in two Situations:
1) You can invest in equity mutual funds & Plan to get over 15% returns year to year.
2) You remain disciplined to continue this investment for 5-10 years.
3) Your child, for whom you are taking the loan- should return or pay the loan instalments (EMI) when he/she starts earning.
Krishna k. Rai asked one query: How to pay EMI, which have now become more than my monthly income?
If you are facing such a challenge. Consult a good financial Planner. He may be able to help you in debt restructuring also. He would look at your past investments, your current income, expenses. he would then come out with solutions
2) Check Your loans. Check your investments and other assets. You may be able to find solutions.
VI) Invest in Yourself. There is no nothing bearer than investing in yourself
Here are a few ways:
A) online short courses. E.g. Udemy
B) YouTube videos
c) Attending Seminars, workshops and conferences on areas of your interest. Look at enhancing your skills, knowledge, habits, and general positive attitude in life.
D) Hiring a mentor or a Coach
E) Meeting a senior or an experienced colleague who is more experienced
F) Buying and reading books, audio books.
G) Your attire to match your profession.
H) Making your image better.
I) Enhancing your family for their overall outlook.
VII) Financial Freedom:
Sweta P. Mishra asked this query: Planning for alternative income early in life: these days people start investing in property or other things to have a steady source of income besides their job. So my question is how does one start planning for retirement early?
Put aside 10% of your income, every month for "financial freedom account". Make this a habit. Then, every year, increase it by 20 %. This is equal to an average increase in salary in India today. Say, you start with Rs. 10,000/- every month for 12 years. Invest in diversified equity mutual fund. Consult a good Certified Financial Planner to help you. You may be able to get
Rs. One Crore in 12 years at an assumed (not guaranteed) return of 15%. After accumulating Rs. One crore, you can opt for SWP (systematic withdrawal plan). It can give you Rs. 75,000/- per month and another Rs. I-3 lakhs. Till the fund gets exhausted.
So, enjoy the new year with these seven top ideas and have a great life ahead.
Note: Glad to share that this article as also carried as title "Financial Planning in 2019"- published in Greater Kashmir Daily newspaper on 1st January 2019