3. Some Golden rules to start financial planning

As a financial planner many people used to ask me that how they should start their financial planning , Where they should invest their money ,which share they should buy, now what I expect from the market as sensex is going down day by day. I always ask them one question that if market has fallen by 20% , what effect they are seeing on their savings or investments . And one pet reply I used to have that they have lost money as they had invested for some days and mean while market fell.

Friends we need to understand that financial planning is not about investing in shares for some days or some weeks to earn some short term profit, it means is to invest my surplus money for some future goals say education of my child , my retirement or my dream house.

Once I asked one of my friend that how much money is he saving on monthly basis for his financial goal and he replied “ Yaar , Kuch bachta hi kahaan hai saving k liye .” And I was amazed on his reply as I knew that he used to go to restaurant and for movie every weekend , still he has reply that he is not able to save money.

We all must be knowing about one formula of saving and i.e

Income – Expenses = Savings

But if we swap these two words the equation may be

Income - Saving = Expenses

And I m sure that just by interchanging these two words may interchange many things and meanings of financial planning in our life.

Golden rules for Finacial planning:-

1. Start investing early. Don’t think to save thousand or lacs even hundreds can do wonders
2. invest regularly
3. Invest in instrument which can give you returns more that inflation like SIP can be one of the wonderful options for savings
4. Increase your savings by some amount after some interval.
5. Clear off your debts (Like credit cards, personal loan and car loans) as early as possible as interest charges on these loans are higher. Remember loans on the depreciable assets are not good.
6. You must earn more that you spend so either increase your earnings or reduce your expenditures.
7. Monitor your expenditures.

Happy Investing

Pardeep goel