Have you cleaned up your Finances?


Hello Everyone!

The whole country is hitched to the Government’s ‘Swachh Bharat Abhiyan’. Are you up for the Cleanliness Drive…???

How about starting with cleaning up your Finances…???

Make it a point to clean up your Finances by considering the following points…

  1. Review your Expenses

Start by reviewing your Expenses – how much of your spending is need based & how much is unplanned or not required. Take a look at your Credit Cards Bills. Don’t take too much of Credit. Reviewing your Budget from time to time is mandatory with changes in your Income & Goals.

  1. Review your Investment Portfolio

Your Investment Portfolio is a mixture of Investments with different level of Risks & Return. Come out of the Investments that are not doing well. Your Portfolio depends upon factors like your age, risk profile, return expectation, Income & so on. Your Portfolio is churned when any of these factors take a turn. Thus, make it a part of your cleaning ritual to review your Portfolio whenever required.

  1. Create your Financial Calendar

Categorize your Short, Medium & Long Term Goals & choose suitable Investments to accomplish them. Also, make a note of important financial dates such as premium payments or deadline for tax filing. Make sure to stick to the dates.

  1. Close dormant accounts

Holding unused Bank Accounts can be expensive. If you have an old account which has not been used for a while you need to close it to avoid penalties. Clean your Finances by closing down such dormant accounts & consolidate your Funds in Active Accounts.

  1. Check your Debts

Debts are an essential component of Personal Finance& they can help you attain your Financial Goals. However, taking more Debts can be burdensome! Just don’t go on taking Loans to accomplish your Goals. Make sure your Debts are in sync with your Goals. In case you have multiple Loans weighing you down, set a priority list with the most expensive ones on top.

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Do you know what your Net Worth is?


Hello Everyone!

Are you aware what your Net Worth is? It is basically how much you own & how much you owe! Net Worth is probably the important measure of your Personal Finance, which is why knowing it is so crucial. Net Worth is crucial if you are in order to achieve Financial Independence & reach Retirement! It is meant for everyone & not only for the rich.

Well, how do you calculate your Net Worth…???

It is a simple formula…

Net Worth = Assets – Liabilities

If your Assets exceed your Liabilities, you have a positive Net Worth whereas if your Liabilities are greater than your Assets then you have a Negative Net Worth!

Your Net Worth can be viewed as a Financial Report to evaluate your current Financial Health & guide you in reaching your Financial Goals.

Here are some reasons why knowing your Net Worth is important…

  1. Most accurate measure of Wealth

There is no way to know exactly how wealthy you are if you don’t know your Net Worth. It gives you a Snapshot of what you own & owe. It highlights how much you will have after paying off your Debts.

  1. Tracks your Financial Progress

It enables you to measure your Financial Progress periodically. A growing Net Worth is a sign that you are doing good whereas a decline shows you have got more work to do!

  1. Important while applying for a Loan

Net Worth is the best measure of your overall Financial Strength thus, Lenders determine whether you will be able to repay the Loan.

  1. Moving the Financial Focus beyond Income

Your overall Wealth is often linked to your Income Level. It has some value but it does not count your Monthly Expenses. If your Income is increasing but your Net Worth is flat or declining…it shows that your Financial Situation is not improving.

  1. Focuses on both Assets & Liabilities

Some people may focus only on their Assets as a measure of their Personal Wealth. For instance, an Individual may flaunt his Rs. 2 crore property as his Asset ignoring Rs. 1 crore in Debt. Net Worth will give you a summary of your Asset as well as your Liabilities & help you repay your Debt quickly.

Therefore, calculating your Net Worth periodically is important. The bottom line is to improve your Financial Situation. Build up your Assets while keeping your Debt Level low!

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Factors determining your Future Wealth!


Saving enough money for your Financial Goals seem like a daunting & complex problem. But how do we tackle it…??? Saving for your Goals – be it your Retirement, Child’s Higher Education or Child’s Marriage…it depends on 3 factors – Time, Contributions & Returns.

As an Investor, you must understand the correlation between the 3 factors & how they interact!


Time plays a major role in any kind of Investment. The eighth Wonder if the World – Compounding works at its best if it is given a long period of time. You can achieve your Goal even if you start with a small amount, you don’t have to worry about the market fluctuations provided you have a longer horizon.


You as an Investor have control over this factor. It completely depends upon you how much you want to spend, save & invest! You must make it a point to increase your Investments as & when you grow in your Career. The level of Contributions you make balances the other two factors!


The Investors worry most about this factor. You may have the least control on this factor, but you must monitor your Investments. It is important for you to have a right mix of Asset Class depending upon your Risk Appetite & Goals. Make sure that your Investments beat Inflation & give you healthy returns.

Ultimately, it is about the understanding of how these 3 factors are connected to each other & work together to achieve your Goals!

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Financial Lessons


Hello Everyone!

Personal Finance isn’t nuclear science.

The basics are simple & can be applicable in our day to day lives.

However, just knowing what to do & actually doing work are definitely two different things!

For instance, you may realize that you are over purchasing but you still recklessly use your credit card.

Here are some Financial Lessons that you must learn & use as soon as possible.

  1. Goals are the key

Goals are something which gives you a purpose in your life. You get a motive to strive for & give you a clear picture of spending your money for. The early you start setting goals in your life, the easier it becomes to achieve them.

  1. Use Compound Interest

Compound Interest is the eighth wonder of world. The one who understands it earns it, & the one who doesn’t pays it! Time plays an important in compound interest. Most people think that earning money is a matter of hard work & saving a lot of money but the true thing to accumulate wealth is to simply start saving & investing from an early stage for a long horizon.

  1. Impulse Shopping ruins Goals

Your short term impulse purchases may hinder your long term goals. Living your life EMI-to-EMI may ruin your Financial Wellness. Learn to be patient & try to fulfill your long term goals instead of getting lured by impulsive shopping.

  1. Be an expert in what you do, success will follow you

Every individual has got a special ability, find it & work on it to become successful. Once you start doing what you love, it builds your confidence. It takes a lot of time, effort & patience but it will be worth it automatically, making you successful & thereby money follows you!

  1. Learn from your Mistakes

Everybody in the lives make financial mistakes. But the key is learning from them instead of repeating them over & over. Instead of playing a blame game, make sure that you learn what to do & what not to do. This will be of great benefit for you in the long run.

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Some Important Financial Moves for 2019


Here we step into a brand new year…and guess what? 15 days have already passed! What is the most common ritual associated with a New Year? Well, it is making New Year Resolutions. But no matter what your resolutions are, the key isn’t making the list, it’s sticking with it!

Here are some important financial moves for your new year which could in a way help you to make your finances stable or better.

Better your Career

You can be financially sound only if you are doing better in your career. Do something to advance your career, get out of your comfort zone & learn new things. There is always something new to learn, improve your career stability & prepare yourself for the next step!

Set up a Long Term Financial Plan

A long term financial plan will depict all aspects of your finances. This plan should be a blueprint of your Life Goals. For instance, when you will buy a house, when you will retire, so on. It must also include an investment strategy to accomplish those goals. A financial plan is much more useful than targeting small financial goals as it gives a bigger picture.

Strengthening your Foundation

A strong financial groundwork is essential to short term & long term financial health. For this, create your spending plan. If you are married, then work together on setting up your finances properly.

Reduce your Debt

Adding up your debt may lead you to financial crisis. Try on getting rid of your debts. You should set a goal that is attainable, but one that you will have to be careful to reach. Set a number of how much extra you want to put towards debt each month, and then work to reaching it.

Cut spending in different categories

Setting up Budget & sticking to it in indeed a tough goal! This is a goal you can work on once you have your budget planned out. You may want to choose one category each month through the year to look for ways to save money. For example, one month you can cut down expenses on your outings whereas next month you can cut down your expenses on your household expenses. If you slash your spending a bit each month, you can save that money for your future!

Engaging with other important Financial Matters

Teach your kids about basic finances. The financial habits they establish now will be of immense benefit when they’ll grow up. Moreover, you can make investments right on behalf of your kids. The value will surely grow till the time they grow up. Take care of your retirement needs as well because leaving a legacy for your near ones is better than depending on them in the latter half of your life!

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Habits to avoid…so that you don’t land up in a Financial Mess!


Merry Christmas!

Here comes Christmas & we enter into the last week of 2018. At the end of every year we tend to let go the things happened throughout the year & look forward to a new beginning. Every year, we go on making resolutions, though following it depends upon each one!

When it comes to your finances, it is your habits that determine your good or bad times. Well, good ones can sustain you in tough times whereas bad ones can land you in financial problems without even a prior notice! Thus, make a resolution to stay financially as well as physically healthy.

We have some bad habits, which you should totally avoid to maintain a good financial life…

  1. Impulsive Shopping

Excessive shopping can create huge holes in your wallets. This may appear as a temporary problem but it holds you back from fulfilling your long term financial goals. So stop shopping unwanted things just to stay with the trend.

  1. Peer Pressure

You may certainly learn some spending habits from friends, family & relatives. They can have both negative & positive influences. Check the lifestyles of your social circle. Do not indulge in over spending just to get equal with your social circle. Accept yourself as you are & cut your coat according to your cloth.

  1. Excessive spending on housing

Maintaining your home is no doubt the most important & expensive responsibility you should perform. Mortgage loans, maintenance, utility bills, the list goes on…Find ways to lower your housing expenses.

  1. Remaining unconcerned about your Debts

Do you know how much you debt or liabilities you have? Are you taking measures to repay it at the earliest? Living debt free life is indeed a true gift!

  1. Being dependent on your Credit Card

Plastic Money does help a lot. It is a savior when you need emergency cash. But you may end up living your life on credit cards. Remember, Credit Cards increase your debts…and you will have to pay higher interest rates!

Live within your means, your life will definitely become easy!

Merry Christmas & A Happy New Year!!!

More Later….

What is your relationship with risk…???


‘Mutual Funds take a long time to give returns. Stocks are risky. Bank Deposits are safe. Do not indulge in high risk investments!’ We keep on hearing these statements lot of time, isn’t it?

But before you blindly trust these statements, let us understand the relationship between risk & returns.

Risk is never a one-sided situation. When you avoid one risk, you are accepting another. Generally, the higher the potential return of an investment, higher is the risk! Though, there is no guarantee that you will actually get a higher return by accepting more risk. The trade-off between risk and return is a key element of effective financial decision making.

Generally, the negative news & risks are exaggerated & over emphasized. This thing drives less informed investors away from the potential opportunities in favor of the investments that can give higher returns over long time.

It is perfectly normal for any individual to avoid risks. Any sane and responsible person who has worked hard for his money should avoid the risk of losing his hard earned money. But that is just one side, the investor who respects his capital, should also fear the monster like inflation. So which risks do you fear most? The risk that we did not anticipate or think about, is always the one that causes the most damage!

Well, do you know what is your Risk Profile or risk taking ability…???

Answer these questions…

  • How much risk are you able to handle?
  • How much risk are you willing to handle?

Your ability to handle risk is your ability to handle an investment loss. For instance, a young investor with no liabilities can invest in high risk investments since he has got a long period of time before retiring. So he can afford maintaining a high risk portfolio whereas, a retired investor with a limited budget of monthly expenses cannot afford a financial loss. He has no time to recover the losses unlike the young investor!

Your willingness to tolerate risk is called your psychological risk which involves the emotional side of investing! Your behavior is more influenced by past investment experiences. It is the level of stress you can handle with the market ups & downs.

What is more important is…you must identify your own Risk Profile first & then build your portfolio accordingly. You may have one of the following Risk Profiles:

  • Aggressive
  • Moderate
  • Moderately Conservative
  • Conservative

In the end it comes down to identifying and understanding all the risks you are exposed to. Decide which of those risks you fear most, and avoid them. Embrace the productive risks that have the potential to deliver higher returns. Devise a strategy to manage and control them. We cannot avoid risk; we can only select certain risks over others!

More later…