Personal Finance with Aradhya

POWER OF SIP!

You can see from the graphic, even if Shahrukh's per month investment is low as compared to other two, but as his horizon is longer, the accumulated corpus is the biggest!

The vision for SIPs should be of long term.

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MUTUAL FUNDS

A mutual fund is a pool of money managed by a Professional Fund Manager.

It is a trust that collects money from a number of investors who share a common investment objective and invests the same in equities, bonds, money market instruments and/or other securities. And the income / gains generated from this collective investment is distributed proportionately amongst the investors after deducting applicable expenses and levies, by calculating a scheme’s “Net Asset Value” or NAV.

Simply put, the money pooled in by a large number of investors is what makes up a Mutual Fund.

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Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully before investing.

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Where to keep your Emergency Fund?

-Your emergency fund should be about 3 to 6 months of your living expenses and should always be liquid so that you can use it whenever you want.

-Another point to remember is that you don't want high returns from your emergency fund.

-It should be safe, accessible and in liquid form.

I've narrowed down your options and they are: Cash, Savings A/c and Liquid Funds.

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EMERGENCY FUND

It is the money stashed away that you can use in times of financial distress. The purpose of an emergency fund is to improve financial security by creating a safety net that can be used to meet unanticipated expenses, such as job loss, injury/illness, major home repairs or any such unexpected bills.

-Fund must be enough to meet your expenses for up to 3 to 6 months.

- Assets in an emergency fund tend to be cash or other highly liquid assets.

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INFLATION IS A SILENT KILLER!

-Inflation rate in India for the month October 2022 reported at 6.77%.

-Average interest rate on FDs of top banks in India gives 6.10%.

-Savings accounts in India gives average interest rate of 3%.

Make sure you keep your money at place where you receive sufficient returns to beat inflation and on top of it makes you some money. Otherwise it's worthless..

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Follow these 5 tips for Financial Independence!

1. Always pay off your debts with proper planning.

2. Limit your spending, track it and try to make it less and invest the saved money.

3. Always make financial goals first and then plan to achieve them.

4. Every individual should have an emergency fund, if you don't have it, build it.

5. At last, be patient and stay consistent.

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Want to retire at 60 with Rs. 1,00,00,000!

Select your age and invest the suggested amount.

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Fixed Deposits in Your name or in Grandpaa's?

Interest Rates for Fixed Deposits in India are in two category: General Citizens and Senior Citizens.

You can check the difference of both the rates in some of the biggest banks of India.

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How long to DOUBLE your MONEY, RULE OF 72 will help!

The Rule of 72 is a simplified formula that calculates how long it'll take for an investment to double in value, based on its rate of return.

You can check the instrument and the time it'll take to double your money. The interest rates are actual as of current rates and may slightly differ.

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With Wedding Season coming, here are few tips for Newly-Wed for your better life.

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"NEVER MIX INVESTMENTS WITH INSURANCE!"

Term insurance plans are life insurance plans which promise to pay a benefit only if the insured dies during the term of the policy. There is, usually, no maturity benefit payable under the plan. Term plans are, therefore, called pure protection plans.

1. Term life insurance is a pure life cover that focuses on offering your dependents the sum assured in case you were to die.

2. Term insurance is known for providing life cover at affordable premiums. Term insurance plans are considered the simplest form of insurance hence the affordable premiums.

3. A term plan offers a much higher sum assured so that you can leave your family and dependents enough money that they don’t go through financial hardship in your absence. Term plan of a 30 year old person will only cost around Rs. 10,000 to Rs. 18,000 whereas ULIP (Unit Linked Insurance Plan) of Rs. 2,00,000 will cost around Rs. 20,000

4. Term Plan has multiple tax benefit: a) Section 80C: Under this section, you can claim a deduction up to Rs 1.5 Lakhs. b) Section 10 (10D): The benefit can be claimed while claiming the pay out by the nominee. The entire amount is completely exempted from taxes.

5. A Term Plan usually has a very low Claim Rejection Ratio which means there is very less chance of the claim getting rejected by the companies.

If you've any confusion in understanding, please feel free to DM me, I'll be glad to help.

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Tags: insurance tips