mintwalk-blog - Tumblr blog

mintwalk-blog · 7 years ago

Text

Are you a professional with an irregular income? We have got 5 easy Financial Planning tips just for you

Professional such as designers, artists, TV personalities, contractors, Freelance writers and IT professionals, consultants and commissioned sales person all have one thing in common-an irregular income. They all have some good months or weeks when there is a lot of work or sales are high. Then there are other times when sales are low and work is marginal. Financial Planning is critically important for these professionals since their expenses and savings have to be planned around their irregular income.

Here are 5 easy and simple to follow steps that will ensure you don’t go broke during the dry spells.

1) Know your expenses It’s human nature to splurge when the times are good and to be frugal when the means are limited. It is important to strike a balance and avoid going overboard with the spending. This can happen only when you know your expenses.

Typically there are 2 types of expenses- Living and lifestyle expenses.

Living expense are the basic necessities that need to be paid for regularly and can’t be missed. Under this you have food, utility bills like electricity, gas and mobile. Your monthly expenses like travel, rent, EMIs and credit card bills. And lastly annual expenses like school fees and insurance premiums.

Lifestyle expenses are those which are neither a priority nor your basic necessity and can be avoided for a while. They include expenses like movies, restaurant, partying and shopping online.

2) Uncertain months Think back and count the number of months that you went without an income or had very little work. This will help us create a backup fund to cover you in case you face any similar situations or if there is a loss of income.

3) Planning for a better future Not having a steady income is no excuse to not plan your financial goals. When you have a regular income, divide and invest your income into the following 3 categories.

a) Living Expenses – Keep an amount equal to your living expense in your savings account. This will take care of all the automated payments such as your EMI and utility bills. Invest anything more than that in your Emergency and Dream Funds.

b) Emergency/ backup Fund– This fund will be used in case of loss or any short falls in your income and in emergencies. You can create this fund by investing in a Liquid Mutual Fund. Liquid Funds generate a return of 6.5-7% which is much more than the 4% that your bank offers. With an irregular income you want to make smart investment choices.

Remember to use this Fund only for your basic necessities and emergencies only.

c) Dream Funds – Everyone has Dreams and it is crucial that no Dream is left behind. Start by creating financial goals. SIP in a Mutual Fund is the best way to achieve goals like your child’s education, Retirement Fund and buying a house. Invest any surplus and the amount needed for the SIPs in a Liquid Fund. This will ensure that the SIPs for your major financial goals do not stop and your dreams are kept alive when the money is tight.

4) Go easy on your credit card

Credit cards help you to go cashless and offer discounts and points which can help with saving some money. But it is easy to get carried away and lose track of your expenditure. So use your card but stick to your budget and financial plan.

5) Create another source of income

This might not be possible for all. But, if you can get a part time job or a contract which might not be high paying but will still provide some extra income.

Now if you have dependents then a Term Life insurance Plan and a Health insurance are a must. This is to protect your family in case of unforeseen events or hospitalisation.

The bottom line is, don’t be the Grasshopper, be the Ant and save during the hay days to secure your financial future.

Invest Now in SIP of the Top Mutual Funds India -SBI Mutual Fund, Reliance Mutual Fund, Franklin Templeton, HDFC Mutual Fund, Kotak Select, Motilal Oswal, ICICI, Birla, UTI and many more.

Give us a missed call on +91-8767134134 Website: www.mintwalk.com Android: App iOS: App

0 notes

mintwalk-blog · 7 years ago

Text

5 Things You Probably Didn’t Know About Child Education Plan. Get Customized Strategy.

Planning every step of your investment from starting a SIP to rebalancing.

Bringing home your bundle of joy is best moment of your life. Your family and relatives will tell you that kids will just grow up on their own, but they don’t! Raising a child and their education costs money and a lot of it.

As parents we want to provide the best possible education to our children. With the cost of higher education and post graduation rising by at least 10% every year, sponsoring post graduation for your child could cost you a fortune. Even in India the fees for engineering, MBBS, and MBAs are through the roof and the cost of classes and entrances exams for the same are quite substantial and could burn a hole in your pocket if not planned well in advance. Right now your child might be too young even for a play school, however, the sooner you start investing for this goal the more time your money will get to grow and the lesser you will need to invest. In this article we will discuss how a new investor can begin by creating a goal and investing based on that and how rebalancing is done to protect your investment.

Start even if you have to start small At the time of birth, a lot of family and friends prefer to give cash to the new born. It will be a good idea to save this money and invest it along with a SIP in an Equity Mutual Fund. When you start investing early for your goal then you need to invest a smaller amount compared to what you would need to if you waited for a few years; delaying could later cause stress too.

Equity Mutual Funds Equity Funds can be your perfect investment partner for this goal. These type of Mutual Funds have a track record of giving high returns of 15% or more in the long term (10+ years). Higher the return your portfolio generates the lesser can be the SIP investment amount. Equity Mutual Funds are also tax exempt thus aiding the faster growth of your money.

Stay committed It is important to stay committed to your goal because child’s education fund is considered as one of the highest priority goals and you shouldn’t lose focus or stop your SIP even if the market isn’t doing well. All through the ups and downs your portfolio will still generate high returns. To avoid missing an investment you could automate your it by using an investment app. This will allow you to make additional investments, increase or decrease the SIP amount and even track your portfolio.

Goal setting Goal based investing is far more effective than investing without one. When you invest based on your goal you know exactly how much you need to accumulate, by when and how much you need to start investing now to ensure your target is met when the time comes.

Your goal should be a SMART goal. Here is how it is done.

S - Specific – In this case saving for Child’s Higher Education is your goal M - Measurable – How much amount you will need in the future- 15Ls, 20ls for both kids etc. A - Achievable and R - Realistic – You might want to accumulate 20 Lakhs in just 10 years by investing only Rs300 which; for this the portfolio would have to generate a returns of 28% per annum. This is neither achievable nor realistic T - Time bound – Knowing when you want to realise this goal is important, that way know how much the money will have to work, would we have to increase or even decrease the investment amount.

Assume your child is 1 year old and you want your child to do engineering from IIT at the age of 18 and would like to start saving for it from now. The cost of engineering from IIT right now is about 1L per annum. With 10% inflation the cost of engineering in 17 years would be 5 Lakhs annually. So by the time your child turns 18 and is ready for college you will need an Education Fund of 20 Lakhs. You now know the target amount and the time horizon, now you need to figure out the SIP amount. 20Lakhs might seems like a huge amount, but if you start a SIP of 3K in an Equity Mutual Fund from today itself, then you will be able to accumulate this amount in 17 years.

Review and rebalance It is important to review your portfolio once in 3-4 quarters; regular tracking will only lead to stress. As you get closer to your goal, it is advisable to start rebalancing your portfolio and increasing the proportion of Debt Mutual Funds to stabilize and protect your investment from short term fluctuation.

Here is the example of how rebalancing should be done. We will take it forward from the above example.

Start a monthly SIP of 3K in an Equity Mutual Fund and continue this investment for 14 years. Right now your portfolio is Equity oriented by the time you reach your goal your portfolio will be Debt oriented; with this the focus will change from wealth creation to wealth protection. After 14 years stop the SIP and redeem units worth 60% of your portfolio and invest in a Debt Mutual Fund. In the 17th year, redeem all the units from your Equity Fund and invest it all in the Debt Mutual Fund. Now your portfolio for your Child’s higher Education Fund only has Debt Mutual Fund. It is from this fund that you will redeem units every year to pay for your child’s fee. Debt Fund will give you liquidity as well as some growth which will help for any extra expenses.

If you need any support creating an investment plan for your child’s education then you can reach our financial experts at Contact Number: +91-8767134134 or Email: [email protected] Click to Start Goal Based Investing with MintWalk.

0 notes

mintwalk-blog · 7 years ago

Text

4 Secrets To Get Maximum Benefits from Mutual Funds

Mutual Funds are great for both long-term and short-term investments

There is a plethora of great mutual funds to invest in. You can easily start a SIP. However, the one size fits all strategy doesn’t work if you are looking to get the most of your investment. Based on the investment objective, risk appetite and investment period, an investor can easily create a personalised portfolio of different mutual funds to enjoy maximum benefits. A smart investor should assess the following things before investing

Your investment objective

This could be growth for your money, wealth protection or a mix of both.

Your goal:

Having a goal helps you stay focused and ensures that you achieve your dream. You can start an SIP or invest a lump sum amount to achieve goals like a retirement fund, car, foreign vacation, marriage and child’s higher education among others.

Your risk appetite:

Your risk appetite is basically your investing personality. How you feel about taking some calculated risks for high returns determines your risk appetite. Most people expect higher returns but at the same time are not open to the idea of taking some risk. So, figure out if you have a low, balanced or high-risk appetite.

Your period of investment, based on your goal:

Knowing how far away your goal is, tells you how much time you have left to create funds to achieve the goal. This helps in planning your investments effectively and efficiently.

The answers to the above points will then determine which funds you should invest in to maximize your gains. It can also help you decide whether you should invest 100% in an aggressive equity fund, or a balanced fund or play safe with debt funds.

Lastly, it’s good to remember that‘benefit’ is a very subjective term. For an investor with low risk appetite, 10% would be high returns while the same for an adventurous investor would be a loss. So, plan well to get the best out of your investments.

View the top performing Mutual Funds for maximum benefits or get a personalised portfolio at Mintwalk.

Give us a call to get expert advice: +91-8767134134

Happy investing!

#mutual funds #benefits of mutual funds #investment #goal based investment

0 notes