Financial planning to meet your future goals: Mutual fund

We all make some plans to manage our income, savings, expenditure, future liabilities (which we expect to spend in the future Mutual Funds), whether we understand anything about financial planning or not. Mutual Funds Although we are managing it well, for now, it can not be the best way to do this or it can not give us the best results. While financial planning can be technical, this means how you recognize your future earnings and liabilities today, list your current earnings and expenses, see if there is a shortage between you and what you get from this May mean the present and then plan your savings and investment to overcome that shortfall.

List current income and expenditure: Mutual Funds

Start with your current income in which your salary, salary of other working members in the family, any other income such as rent, business income etc. should be added and remember that you deduct the taxes paid on each income In the end, in the end, at present, arrive at the net income for your family. 

After coming to your family's net income, cut all expenses for the year such as home expenses, tuition fees, loan EMIs or any other short-term liabilities (expected within the next 3 to 5yrs) such as the home or a medical treatment Renewal etc. Post this deduction that you get right now is the savings that you need to invest wisely for the future.

Setting future life goals Mutual Funds

The next step in financial planning should be to reduce the financial liabilities of all your future, at the time they arise, the amount you need etc. 

Goal 1: For example, if you are a 40-year-old person and expect to get your daughter's college education going after next 8 years and estimate that about 30 lakhs can be spent, do you have Will it be funding to finance it? After 8 years, to achieve this goal, decide on an investment and the amount you need today. 

Goal 2: Similarly, if you intend to retire at the age of 60, then you need 1 lakh ppm to maintain your current lifestyle, which is worth INR 50,000 in today's value. Given the progress in healthcare, you can easily hope for 25-30 years of retired life. The money you need to live your retirement life can be funded by long-term low-risk investments (such as debt mutual funds, pension plans). Set aside some funds for such investments to be done today. 

Goal 3: You can keep money aside to buy some health insurance, which you will need in your retired phase or even earlier. Insurance premium needs to be funded by your current savings. The goal-setting process helps in understanding the future needs of your future, determining them and investing in the right asset class to meet each goal, if appropriate.

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asset allocation: Mutual Funds

While asset allocation can be done with target setting, it is better to understand how asset allocation can affect the success of your financial plan. You can invest your savings in various asset classes such as equity, debt, gold, real estate etc. Look at the investments you have already made, such as if you are the owner of a PPF or EPF account, you have already made it by investing in bank FD, home loan, etc. With current savings and investment, you have already done it. Calculate the percentage of the allocations made to the asset class. For example, all bank FDs, PF funds, government bonds, debt-oriented pension plans should be classified as loans. Any money invested in an IPO, company stock, equity mutual fund should be categorized as equity, loan EMI should be classified as real estate etc.

As a rule of thumb, 100 zeros of your current age should be allocated to equities and equity, just like a product. If you are 40 years of age, 60% of annual savings should be invested in equities such as equilibrium in products and loan products. If your current investments do not reflect this, then try to balance your investment by reducing the money you put in debt products like FDs and bonds and divert the money to equity mutual funds or stocks. 

Most people are not comfortable investing in stocks because it requires special research, continuous monitoring and a lot of stress. Hence equity mutual funds are a better option because your money is managed by professional managers, who do all the research on the companies before investing and constantly monitor the fund's performance by buying good shares and selling underperforming stocks.

start early

You should start your financial planning early because it will give you the benefit of a compounding option to choose which investment you will invest, your money will grow for a longer period with compound returns every year. 

Annual review and imbalance 

While a sound financial plan is a good starting point, follow it with discipline and pay your portfolio every year. It is very important to make a balance. Since life's circumstances change over and over again, you should take care of your plan along with your financial advisor and make changes to reflect on your new situation. 

If you are new to mutual funds, mutual funds are available for more information. You can also talk to your existing mutual fund distributor to help you choose the right mutual fund that is debt or equity.

MOR.