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ഫിനാൻഷ്യൽ ഫ്രീഡം: അറിഞ്ഞിരിയ്‌ക്കേണ്ട കാര്യങ്ങൾ

ഫിനാൻഷ്യൽ ഫ്രീഡം അഥവാ സാമ്പത്തിക സ്വാതന്ത്ര്യം സ്വപ്നം കാണാത്തവർ ഉണ്ടാവില്ല. അനാകർഷകമായ തൊഴിലുകളിൽ പോലും ആളുകൾ ഏർപ്പെടുന്നത് എന്തു കൊണ്ടെന്നു ചിന്തിച്ചിട്ടുണ്ടോ? ജീവിതത്തിൽ സാമ്പത്തിക സ്വാതന്ത്ര്യം കൈവരിയ്ക്കാൻ ആഗ്രഹിയ്ക്കുന്നത് കൊണ്ടാണ്. സന്തോഷകരമായ ഒരു വിശ്രമ ജീവിതം ആഗ്രഹിക്കുന്നത് കൊണ്ടാണ് കരിയറിന്റെ തുടക്കത്തിലേ സുഖകരമായ ഒരു റിട്ടയര്മെന്റിനു വേണ്ടി പലരും മുന്നൊരുക്കങ്ങൾ നടത്തുന്നത്. എന്നാൽ റിട്ടയർമെന്റ് അല്ല സാമ്പത്തിക സ്വാതന്ത്ര്യം ആകണം ലക്‌ഷ്യം വെയ്‌ക്കേണ്ടത്. ഇവിടെ നമ്മൾ സംസാരിക്കാൻ പോകുന്നത് ഇതെങ്ങിനെ കൈവരിയ്ക്കാമെന്നും അല്ലെങ്കിൽ എങ്ങിനെ വേഗത്തിൽ അതിലേക്ക് എത്തിച്ചേരാം എന്നുമാണ്.

നമുക്ക് ജീവിതശൈലീ ചിലവുകളും അത്യാവശ്യ ചിലവുകളും ഉണ്ടാകും. ഇതിനാവശ്യമായ മതിയായ പണം നമ്മുടെ ആസ്‌തികളിൽ നിന്നും നിക്ഷേപങ്ങളിൽ നിന്നും ലഭിക്കുന്നുണ്ടെങ്കിൽ അതിനർത്ഥം നമ്മൾ സാമ്പത്തിക സ്വാതന്ത്ര്യം കൈ വരിച്ചു എന്നാണ്. ഇവിടെ ശ്രദ്ധിയ്‌ക്കേണ്ട കാര്യം എന്തെന്നാൽ ഒന്നുകിൽ നമ്മുടെ സ്ഥിര ജോലിയിൽ നിന്ന് കിട്ടുന്ന വരുമാനം ജീവിത ചിലവുകളേക്കാൾ കൂടുതൽ ആയിരിക്കണം. അതല്ലെങ്കിൽ ബാങ്ക് നിക്ഷേപത്തിന്റെ രൂപത്തിലോ മറ്റേതെങ്കിലും രീതിയിലോ നമ്മുടെ കയ്യിലുള്ള സമ്പാദ്യം ചിലവുകളേക്കാൾ കൂടുതൽ ആയിരിക്കണം. എങ്കിൽ നമുക്ക് ജോലിയിൽ നിന്നുള്ള വരുമാനത്തെ ആശ്രയിക്കേണ്ടി വരില്ല.

മിക്ക ആളുകളും ആശ്രയിക്കുന്നത് തങ്ങളുടെ ജോലിയിൽ നിന്നോ ബിസിനെസ്സിൽ നിന്നോ കിട്ടുന്ന വരുമാനത്തെ ആണ്. ഇത് കൂടാതെ നേരത്തെ സൂചിപ്പിച്ച നിഷ്ക്രിയ ആസ്തികളിൽ നിന്ന് വരുമാനം ലഭിയ്ക്കുന്നണ്ടെങ്കിൽ മാനസിക പിരിമുറുക്കം ഇല്ലാത്ത ഒരു ജീവിതം നയിയ്ക്കാം. നിഷ്ക്രിയ വരുമാനം കൈവരിയ്ക്കാൻ ഉള്ള ചില മാർഗങ്ങൾ ഇതാ:

  • നിങ്ങൾ വാങ്ങിയ വീട്, സ്ഥലം എന്നിവയിൽ നിന്നുള്ള വാടക
  • നിങ്ങൾ അപ്ലോഡ് ചെയ്ത യൂട്യൂബ് വീഡിയോയിൽ നിന്നുള്ള വരുമാനം.
  • നിങ്ങൾ എഴുതിയ ഒരു പുസ്തകത്തിൽ നിന്നും കിട്ടുന്ന റോയലിറ്റി
  • സ്റ്റോക്കിലോ മ്യൂച്വൽ ഫണ്ടിലോ ഉള്ള നിക്ഷേപങ്ങളിൽ നിന്ന് കിട്ടുന്ന ആദായം
  • ഫിക്സഡ് ഡെപ്പോസിറ്റ് നിക്ഷേപങ്ങളിൽ നിന്നുള്ള വരുമാനം
  • നിങ്ങളുടെ ബിസിനെസ്സ് സ്ഥാപനത്തിന്റെ ഒരു ഫ്രാൻഞ്ചൈസിയിൽ നിന്ന് കിട്ടുന്ന വരുമാനം

സ്ഥിര ജോലിയിൽ നിന്നായാലും നിഷ്ക്രിയ ആസ്തികളിൽ നിന്നായാലും ലഭിക്കുന്ന വരുമാനം വിനിയോഗിക്കുന്നതിൽ  ഓരോ തവണയും ശ്രദ്ധ ചെലുത്തുമ്പോൾ നിങ്ങൾ ചുവടു വെയ്ക്കുന്നത് സാമ്പത്തിക സ്വാതന്ത്ര്യത്തിലേക്ക് ആണ്. ചുരുക്കത്തിൽ സാമ്പത്തിക സ്വാതന്ത്ര്യം കൈവരിക്കാൻ റിട്ടയർമെന്റ് വരെ  കാത്തിരിക്കണമെന്നില്ല എന്നർത്ഥം.

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Money Making Opportunities for House Wives or Retired People

The idea of working from home/working online from home caters mainly to home makers and those retired who would want to make productive use of their resources or simply want to make money and create wealth. For them, options are plenty and here are some of them:

Money Making Ideas

Look for apps like Make Money Online where plenty of ideas are available for those who seek to work from home and generate income. Best for people who have a specific technical skill set, some include creating a You Tube channel or a blog.

Be a distributor

Apps are available where commodities including clothes will be on display. Here, you can opt for products of your choice and market them among your family and friends through WhatsApp. At the time when someone shows interest in any of them, you can make an order in the app along with the address to which it will deliver. Once the customer makes payment to the app, a share of profit goes to the manufacturer and the distributor. Meesho, Glowroad and Shop 101 are few such examples.

Show Your Skill

If you have any specific skill such as creating apps, LinkedIn profile or writing content, there are apps where you can register. An example would be apps like Fiverr in which you can mention your specifications which include your skill set and task you would like to do with a quote. As per your specification and quote, you will be assigned work and be paid for it.

Tele-calling Jobs for Corporates

Do you have good communication skills in English? Then, apps like Squadrun are meant for you! Here you will have to undergo an e-learning course on basic introductory module prior to the job. Once you do that, you will be assigned projects which might include calling the clients of your employer and explaining to them about a specific brand or doing an online survey.

Online Tutorial

This is suitable for qualified people who are interested in giving online tutorials. Suppose you are well versed in maths and what to impart this skill in some way, you can register in apps like Chegg Tutors. You will receive questions from students of foreign universities who fail to find a solution for their maths problems. You can post the answer by providing step by step instructions in the app. If the customer finds it satisfactory, you will get paid. There are plenty of similar apps.

Online Trading

For someone who has received training on online trading, intraday trading in stock market is a good option. There are places which provide training in online trading. You will even find it on YouTube. Once you have a good knowledge on this matter, online training definitely reaps rich rewards.

With a little dose of persistence and dedication, you can generate income and possibly create wealth. Wealth creation is for everyone anyway!

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How Do we Buy shares

Want to Buy Shares – Here is how

Buying shares is exciting as well as risky. Wondering where to purchase shares from and sceptical about the procedures. Do not worry! The whole process is very easy that it doesn’t take much of your time. Here, let us go through the basic procedures need to followed to buy a share.

Shares can be purchased from primary market and secondary market.

Primary Market

A company’s promoters seek additional funds sometimes by listing the company in capital markets.

Through IPO (Initial Public Offer), funds are raised for capital and a multitude of other uses. The retail investors can apply for IPO stocks online provided they have a bank account and a demat account.

There is also another scheme called ASBA (Applications Supported by Blocked Amount) through which investors can block the money in the account until the share is allotted. The investors can provide the bank with the Demat account details after which the money gets debited once the deal is finalised. The whole process is hassle free which doesn’t take more than 10 minutes.

Secondary Market

Once the company is listed in IPO, its shares will be available to investors in secondary market.  Those interested can buy or sell these shares.  However, the price will vary based on demand and supply.

In order to buy shares, one must have a

  • Trading Account: Trading account is the link between a person’s bank account and Demat account. It is here that a customer orders whether to buy or sell a share. There are brokers who will help you open a trading account.
  • Demat Account: Here, you store the purchased shares. It serves the purpose of a bank locker.

Factors to note while  Investing 

  • While identifying a broker, make sure of the facilities s/he will provide you such as advices and the brokerage fee for their services
  • No fee is levied to start a trading account though the Demat account comes with an annual maintenance charge. A specific amount is levied while you sell the shares too.
  • Do a KYC (Know Your Customer). In order to do that provide your
    • Proof of Identity – Provide identity cards such as Pan Card or Adhar card
    • Proof of address – Provide address proofs such as Adhar Card or driving license
    • Bank Details – Details of the bank in which you have the invested money
    • Proof of Income – Six months bank statement or an income tax statement which helps a broker understand the financial stability of a customer.

The process of   buying shares  is totally trouble free. Be wise by starting a demat and a trading account and pave your path to wealth creation.

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What an Investor needs to know when markets hit a new low

In these unsettling times, knowledge, patience and endurance are the things that will keep your money safe. Find out, what you; as an investor, needs to know and do when markets are crashing and otherwise, here.

How does one deal with murky market fluctuations?

By the one way the wise have always taught us.

Through acceptance.

Accept the uncertainty of the times. Trying to predict market directions at this time is futile.

How must i deal with my investments ?

Just hang in there !

If you are dealing with SIPs, continue investing. This is when you are buying at a cheaper prices; especially when it comes to Mutual Funds or SIPs.

Can i invest huge funds in the markets when it has crashed ?

This is never advised.

Always invest in parts. Always be certain of your goal. Ask questions like how much fund do you have, how much are you willing to invest now, what is your risk taking ability, how long can you invest, when do you want your money back.

If your time period is limited; say a year or less, then do not contemplate putting your money here.

Only invest if you are looking at things through a long term lens. Wealth creation is for the committed and requires you to take the long haul.

DO NOT rely on the stock market recovery for your short term goals.

What to look for when Investing

Asset Allocation– While investing do not look for higher growth funds. Always find the middle ground for a balanced investment.

Invest a certain portion based on your risk profile and a certain portion in equity.

So allocate funds in asset classes based on your risk appetite.

Goal based investment Always know your purpose of investing. If you have none, go forth and create one. Take time out to define your goals. Do this and you will be paid back handsomely, eventually.

And based on this clearly envisioned goal, you will know what asset class is right for you.

 

This is the time to invest based on one’s knowledge. If not, take professional aid. Look for a financial advisor who is qualified; who can probe into your needs, your risk capacity, your investment time frame, the surplus amount you are willing to invest and eventually suggest the area of investment catering your needs.

What to stay away from

With the many advertisements offering unsolicited advice on how to handle money during a market crash, do not fall prey into making investment decisions based on this.

Always study thoroughly or seek help of a qualified financial advisor for the same.

What must your checklist contain?

Check if you have an emergency fund, if you have made arrangements for any short term investments. Check and invest safely in options like debt fund, fixed deposits etc. and not in equity in these volatile times; which will require you to take risks.

Also, check if you have insurances– like term insurance, medical insurance etc.

It is also not the right time to buy loans once the market has crashed.

 

Financial discipline is your responsibility. This is what you owe your money. Always take advice before investing.

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What Is Insurance

The life and property of a person is laden with risks of death and disability.

Insurance is transferring this risk to an insurance company.

Most people mistake insurance as an investment  which is not the case. It is a protection against contingencies such as the death of the policy holder or damage of his property. In return for the premium paid, the insurance company promises to cover the losses for the property or life of the insured.

The purpose of the whole process is to ensure the affected family does not face any financial hurdles in case of unexpected occurrences.

Let us take the example of motor insurance. The reason for taking motor insurance is to provide financial protection against damage to your vehicle as a result of an accident or a collision. In case of accidents, insurance companies are expected to provide the amount required to repair the vehicle.

The same is the case with life insurance.

Two Important Reasons for taking Insurance

There are two important reasons why someone needs insurance – Life cover and medical emergency.

Life Cover

The life of insured is covered in insurance. In case any mishap occurs to the insured, the affected family gets a lump sum amount so that they do not face any financial hurdles.

Let us assume the sole breadwinner of a family passes away. If a financial emergency arises at this point, this insurance amount will help the affected family survive the urgent requirements.

Medical Emergency

The medical requirements of an individual are covered in medical insurance. During a medical emergency, the insurance companies are expected to provide the fund needed for the treatment based on the sum assured.

Most people take insurance as part of tax planning. People jump into it without proper study which results in ending up in policies which are not suitable. One must consider their life risks or the sum assured before taking a policy.

Insurance as said above is a protection against one’s life and property. So assess the life risks and choose a policy based on your requirements.

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Emergency Fund

It can be a major repair to your house, a broken bone or a layoff- when facing such crisis; you will be able to manage if you’ve had an emergency fund.

Emergency fund is a safety net or a readily available form of assets in the form of liquid fund to withstand an emergency that may occur in your life. It is a foundation stone in which you start your journey towards financial freedom.

When a job change or a forced break or a medical emergency occurs, it will disrupt the income flow bringing a sudden change in lifestyle. In such scenario, in order to meet the monthly expenses, emergency fund in liquid form must be available so that house hold management doesn’t get affected.

How can one build an Emergency fund ?

The safest way to creating emergency funds by saving money required for monthly expenses for one year in savings account.

If you find it practically impossible, money required for at least three months of monthly expenses must be there in savings account in liquid form. If the emergency fund is for three months, it can be created in savings account. If it is for nine months or a year, the fund for three months can be created in savings account while the rest of the funds can be invested in FD liquid fund.

Still sceptical about emergency fund?

Many find it difficult to withdraw invested funds when the emergency arises due to many underlying situations.

If you have invested in equity or stocks, unfavourable market conditions may stand as a hindrance.

In the case of FD, most banks will have a lock in period which makes sudden withdrawal all the more difficult.

If it is in gold that you have invested, any depreciation in its value might make matters difficult.

In short, if you have an emergency fund, it helps you prepare for any mishaps or criticalities that may hit your life.

Even those who are taking baby steps in investing must create an emergency fund to survive unexpected events.

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Zero Percentage Bank Loan

Zero Percentage Bank Loan

Tempted on seeing zero percent loans?

True, it isn’t easy to escape the attractive offer to buy a much sought after product on EMI basis. Of course, there is nothing wrong in going for it. However, beware of the underlying traps in these loans; what may look like a luring offer may end up emptying your pocket.

So, it is good to take care of few points so you better manage your money.

Increase in Spending Habit

When you receive offers such as ‘to buy a product for 50,000 through EMI option in 6 months’, you are definitely going to go for it even if you don’t have the cash in hand. Thus, these loans are sure to increase your spending habit.

Discounts May Not be Applicable

When you purchase a product in cash, you may receive an instalment of 2000 Rs. or 3000 Rs. as discount. However, when you pay in instalments, the price is calculated in MRP, as a result of which discounts may not be available. So, before taking up the instalment option, be clear about the amount to be paid.

Processing Fee

While making purchase in instalments, the customers will have to pay a processing fee. Before venturing into it, make certain on whether you need to pay any processing charges. Processing charges and the lack of discount options are the source of profit for the shopkeeper.

Do not Miss the Payment Date

Missing the payment due date means you will have to pay an additional penalty charge and added interest rate. Try avoiding this as by paying this extra amount, you will lose the advantage of zero percent loans

Tips to follow before you decide to follow zero-percent loans:

  • Check the difference in the discount in MRP while making cash payments and other modes.
  • Check whether you are receiving any discount in zero percent loans. If yes, these loans are indeed beneficial.
  • Be clear about whether you have to pay any processing fee while taking up instalment option. If you receive the product minus the processing fee, then this zero percent loan is profitable. If not, zero percent loans are not very profitable.

As said above, there is nothing wrong in going for instalment option while purchasing a product. However, while doing it, make sure you don’t end up paying more.

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What to watch out for when Investing

Investors, new / existing, take note ! Here are some the salient points to take heed of while you are on this journey.

Investment is an essential part of one’s wealth creation journey. But there are a few factors that need notice of and regular monitoring so that the effort doesn’t go to waste later.

Here are some points to consider and take action on. Pronto !

  1. Track every investment you make.

Once an investment has been made, regular monitoring of the value of the same must be done. We must check all the documents filed while making that particular investment. If there are changes in the documentation of these details, update them so that communication channels are clear for future purposes.

  1. Check if you’ve filed or updated the right nominee

Let’s consider a simple scenario. You may have made your investments before you’d gotten married which means you didn’t have a nominee to begin with. Or you’d had your parents as nominees and now that you’ve expanded your family through marriage, your spouse may be more dependent on your investments in the present circumstance. If this is so the case, create a nominee or update it to present dependent.

  1. Inform your family of your investments

If you’ve made any previous investments or are on the verge of making one, then you are responsible for informing your family on the same. Nothing related to your investments must come as a surprise to them. They mustn’t be rendered financially clueless or disabled in unfortunate times, in your absence.

Another scenario with the millennials and the new generation crowd is that they make investments and get information and updates on platforms like email and phone that are password protected. While this may keep one safe, if the higher purpose of this investment is for your family to lead a healthy financial life then sharing password details to the close one is essential. In case of one’s untimely demise, such information with come in handy for their confidant.

  1. Create a will statement or a succession plan

A person may have all kinds of investments like land, buildings, real estate, market shares, mutual funds, bank fixed deposits etc etc. In such a case, it becomes imperative of us to create a succession plan or will statement that elucidates what we wish for the next of kin or family to inherit.

  1. Update your will statement

While you were at it in your 40’s, it is essential to come back to it later because let’s face it, change is inevitable. Probably, you must have accumulated wealth over the years and so your will statement may look different if you’re to deal with it in your 60’s.

  1. Update bank details of all investments made

All your investments/ insurances are linked to your bank accounts. But over the years, you may have made changes to these. You may no longer be using the services of some whereas new personal bank accounts may have emerged. Identify the obsolete ones and update your bank details in the documentation.

  1. Update your communication address (online/offline) as when required

A transferable job is the trend these days in India. With every work transfer, an update on the address details must be made. If the institution/corporation needs to convey a message, they may do so to the old communication address (if not updated with each transfer) and you’ll never receive information on your end. Also, if email addresses have been changed in previous times, they need to be updated wherever required. This will help create an effective communication channel.

 

These points must have driven home the most important point for investors and that is documentation, updation and transparency are key factors to track every now and again when it comes to your investment. Nothing else matters as much for a fruitful wealth creation journey.

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Choosing the Correct Investment

Choosing the Correct Investment

 

‘A minute to learn, lifetime to master’ applies well for investments. Before embarking on a journey to be an investor, it is worth taking few days to research and comprehend on the chosen scheme and its fundamentals.

Rushing into it without understanding one’s own requirements and goals may backfire and fail the whole purpose of an investment.

The three factors to be considered before choosing an investment are the time at one’s disposal, risk capacity and returns.

The first two are the deciding factors in determining the final output, returns.  Understanding these three factors helps in identifying the correct investment. While choosing an investment, follow the following tips.

  • Invest in savings account or FD liquid fund if the time span is short. Savings provide 3 percent interest while FD provide 6 percent interest.
  • Invest in debt or debentures which provide give 9 percent interest if you have a time span of 1 or 2 years.
  • Choose equity or gold if you have more than 7 years at your disposal.

In savings or FD or debts or debentures, the fluctuations as well as growth will be less. Whereas in equity or gold, the returns depend on the market growth though there is every chance of getting higher returns.

So, it is important to understand one’s own risk capacity and time span which becomes the deciding factor in ensuring returns. Lower the risk, lesser will be the returns. If one need higher returns, he or she must have the capacity to take more risks too.

There is nothing like the best product. It differs based on investor’s risk taking capacity, time span and the desired goal.

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Money Management

Money Management

Ever wondered about the inability to save money despite being handsomely paid? Do not be worried as the attitude towards money is reflective of one’s personality and there are more like you.

Based on one’s approach towards money, financial experts have categorised people into three – spenders, savers and investors.

Spenders

The spenders, once they receive the salary use the money for their expenses and save the surplus amount. For example, those who mainly make their payments through credit card use the salary received for credit card payments.

If you are a spender, read our do’s and don’t’s with money to avoid financial pitfalls.

Savers

The second category of people save a specific amount from their earned income after which the remaining is spend in meeting monthly expenses.

Savers can take their game to the next level by knowing how to choose the right investments for them.

Investor

Investors are the real wealth creators. Once they’ve received their salary, they invest a specific amount in an asset class with a high growth potential. The rest of the money is used for expenses.

Take for instance a case where someone buys 1 gram of gold every month.  If he/she continues to do this for 10 years, they will have 120 grams of gold in their possession which will be a huge asset considering the soaring gold price. They are the example of an investor we are talking of here.

Likewise, investors identify the most suitable investment option based on the requirement and time span which he or she plans to invest. This helps them attain financial freedom.

If you are salaried, it is important to understand the category you belong to. Do not worry if you are a spender. Manage your spending habit and try being a saver which is the first step to be an investor. If you are a saver, identify a good investment option and multiply your money like an investor.

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