Came across a post on the Facebook “friends
don’t let friends eat any sweets in 2013; need to lose 10 lbs”. Comes New Year,
along come lot of resolutions; some about weight, some about vices but none
about wealth and my resolution for the New Year is to put people on the right financial
track. In fact as we ring in the New Year, here are certain things that
are guaranteed to secure and grow your wealth in the coming year.
Ø Review
and Analyse
Having clearly chalked out your financial plans is the
beginning but your short term goals may change due to changes in your lifestyle
or circumstances, such as an inheritance, marriage, birth, house purchase or
change of job status and that can interfere with your medium and long term
goals. It’s very important to revisit and revise your financial plans so that
you stay on the track with your long term goals. A yearly review is important
to know how various investments are doing. Besides identifying the laggards
that should be trashed, it also tells you if you need to rebalance. It is often
difficult for us to review our financial plans without being emotional. Best
seek professional help and higher a financial planner.
Ø Do
not stagnate in a bad job
Though the job market is not too promising do not allow yourself to get
stagnated if you are unhappy with the current assignment. Upgrade your skills,
and explore options.
Ø Mind
your debt
People seldom realise that they are headed for a debt trap till they are
actually trapped in it. Learn to differentiate between a good loan and a bad
loan. A good loan is one which adds more value than it takes away. Home loan
and education loans are good loans. You get tax benefit too on the repayment of
these loans. Stay away from personal loans. They are bad, expensive and basically
rip you apart. I know people who’ve availed personal loans for a mere foreign
trip, trust me it’s a bad idea. Credit card these days is synonymous for
convenience but convenience comes with a price attached to it. You have a
period of 45 to 50 days which is a zero interest period; there after the
charges are approximately 3% per month or 43% per annum because it is
compounded, not to forget the service charges. Horrendously expensive! So
if you succumb to the pleasures of using a credit card often, it’s time now to
start using it judiciously. Also if your EMIs are more than 25% of your income
than it’s a matter of great concern..
Ø Buy
Insurance.
Forget income tax benefit and return oriented plans. Buy a pure term
plan and secure the future of your dependents. The best time to buy insurance is
today because you get insurance only when you are in good health. It’s a
privilege. Everybody does not get insurance. For more details on the quantum of
insurance amount read http ://vandana-dubey.blogspot.in/2011/12/how-much-insurance-do-you-need.html
Ø Do
not get lured by high returned schemes
Do
resolve to stay away from schemes assuring more than 20% returns per month.
There is either some magic or more likely some scam. In that case the best way
to double your money would be to fold it and keep it in your pocket. Be an
investor. Do not speculate.
Ø Plan
for the Retirement
I
know most of us haven’t given it a thought yet; but it’s never too early or
never late to start planning for the retirement. The National Pension Scheme
(NPS) can be a useful tool. Also do not forget to transfer your PF balance when
you shift jobs. It could be the cheapest way of saving for your retirement. Most
of us either ignore it or withdraw it and spend it. Do not ignore it as the
corpus would not fetch any interest after three years.
Last but not the least, it is
indeed tempting to buy that trendy tablet or fabulous smart phone; do ask
yourself; do I really need one? You could be doing that at the cost of other
important financial goals. More on this to follow later. Till then Stay
Blessed!! Happy 2013!!
