Seesaw of being dependent and becoming independent financially
PS: picture taken from google
We have all longed for a life filled with comfort and luxury at some point, but we often achieve that by being dependent on our family or significant other. We get so delved into it that we often forget our roots, leading to failure in planning to achieve our goals.
1) Educate
First thing is to educate yourself. Knowledge is never wasted. Know matter how much knowledge you have regarding investment you’ll always feel like a fresher when investing. So constantly educate yourself and this can be done through
- read newspapers
- Learn about the market through networking
- Listen to podcasts
- Read Books on investing and financing
- Check out some courses
- Watch YouTube videos
2) Invest-
- Mutual funds: Mutual funds are a good investment for investors looking to diversify their portfolios. Instead of going all-in on one company or industry, a mutual fund invests in different securities to try and minimise your portfolio's risk.
- Equity: set aside a small sum of money every month for investing in equities when you get your salary. Ideally, one should invest only that much money in equity which is not needed for at least say 3-5 years. Further, equity allocation largely depends on your risk appetite and age.
3) Spend -
4) Emergency Funds-
One way to be financially free is to let your investments grow and not keep touching them regularly. One of the surest ways to let your investments grow is to have an emergency corpus. This is a small pot of money that you keep aside for emergencies or contingencies.
5) Insurance -
Health insurance is just as important. This insurance pays your bills in case of sickness and hospital admission. You could meet your hospitalisation expenses with your savings. But once you dip into your savings, the amount goes down by that extent and it can take years to replenish it. On the other hand, if your health insurance foots the bill, it gets replenished immediately, ready to take on your hospital bills in the next year itself, if the need arises. That is why you need health insurance.
An effective financial plan will keep you secured. For one to have an effective plan they must have the tips that I have mentioned above.
I hope these tips help you in your journey to becoming financially independent. And break the stigma of being financially dependent.
“A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.”
— Suze Orman
Comments
Post a Comment