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How to Manage Money and become Rich | 6 Simple steps to Get Rich | Financial Plan - YouTube
Channel: pranjal kamra
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Hello Friends.
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We all know that a proper financial plan is needed,
to reach your goals.
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You need to know, that after 20 years,
how much money do you need?
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how much insurance you do need?
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and from today, you have to do saving and invest,
according to that,
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have to get investment policies and
plan your retirement and tax planning.
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But when I was saying this, you got worried right
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most of the people don't do good financial planning, because
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it seems very much complex
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like too much paperwork, time and complexity are involved
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so we think, "Leave it!", let things be as it is.
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we'll just do a SIP in a mutual fund and an FD in a bank.
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Because of this, you lose a very big wealth-creating opportunity.
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So today, I will make financial planning very easy for you.
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Just by giving a few minutes a month,
you can do your financial planning
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and fulfill all of your dreams.
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So today I am going to tell you, 6 steps
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simple, financial planning, which you can do yourself
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and complete all of you goals.
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Hello friends, I'm Pranjal Kamra
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let's start today's 6 steps of simple financial planning.
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Before starting today's financial planning
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I tell you this
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my full focus is, on this financial plan that I'm telling you,
to be as simple as possible.
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Because a good financial plan should be simple and effective
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if that plan is too complex, then it's not a good plan.
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If your financial planner gives you too much insurance,
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too many mutual funds, too many retirement plans,
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suggesting you all this,
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then you can tell, they are not giving a good financial plan.
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The first quality of a good financial plan is, that it's simple.
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So what are this 6 steps? First comes savings,
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then comes your loans or debt,
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after that comes insurance,
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then at fourth, is your investment plan,
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fifth tax plan and last retirement plan.
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So we will discuss all these 6 points
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and at the end of this video, you'll find out,
how's your financial plan going to be.
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Let's start first with savings.
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You have to remember one thumb rule
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that, the monthly expenses at you home
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let's think your home runs on Rs-30,000 per month,
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were kid's monthly fees, ration, everything get's paid.
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So you have to keep at least this much,
safe in your savings account
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for 6 months, so your house can run.
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so if your monthly expenses in Rs-25,000
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then you have to keep Rs-1,50,000 on your savings account.
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If something happens tomorrow and you lose your job
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then you'll have an opportunity to find a new job.
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So 6 months emergency fund, which
will be in your savings account.
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But, I have said in another video that
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how can you get FD like interest in your savings account
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and withdraw that amount, anytime you want to.
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So how can you do that?
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To know that, definitely watch this video
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the link is in the above card and in the description.
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So that is savings, the money you have to keep
in your savings account,
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should be equal to your 6 months' earnings.
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Your first financial step.
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Second step, what are such loans?
Where you pay too much interest.
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Two types of loans are there, good loans and bad loans.
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Which are good loans? Housing loans are good
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because it's very cheap, around 8% to 8.5%
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and has tax benefits, so don's rush to prepay them.
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If you have a personal loan, where you are paying 12%-14%
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and also investing in mutual funds,
which gives you 14%-15% return
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instead of investing in mutual funds, it's better
to gather all the money
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and end this load, where you are paying 13%-14%.
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So second step is, to end all the bad, high-interest loans
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before starting an investment, your focus
should be on ending all the loans
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where you are paying interest of 12% or more.
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This is the second step, stopping all the expensive EMI.
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Now comes third step, Insurance
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and this step scares many people.
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I've seen many people in our Finbox, Master plan,
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when they subscribe to our financial plan services
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and portfolios comes for reviewing,
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I'm astonished to see, some people have 10-12 insurance policies
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and with that, 50 mutual funds and 100+ stocks
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all of this, in one portfolio
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such complex portfolio.
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So insurance this much, 10-12
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I see ULIPs, Money backs, Endowment plans, Term Plans
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there's no need for all this.
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Keep insurance very simple.
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The first thing is life insurance, second is medical insurance.
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Life insurance for the earning members of the house
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if only you earn and no one else.
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What's your yearly earnings?
If your yearly earning is Rs-4,00,000
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then you have to take life insurance of 20x times that money.
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Means Rs-4,00,000 x 20, which is Rs-80,00,000
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you have to take Rs-80,00,000 Basic life cover
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also, you can take Critical illness cover with that.
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And you don't need any other insurance
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if you have children who dose not earn, then
they don't need life insurance for them.
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If you have non-earning members, don't take insurance for them
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for the earning member, take life coverage
of 20x times their annual income
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it's very cheap that way. If you are roughly around 30-35 years
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then the yearly premium will be around Rs-10,000-11,000
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less than Rs-1000 a month and you'll get life coverage of Rs-1 crore.
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To know more about this, watch this video
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the link is also in the card and in the description.
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So now your Life Insurance problem is solved.
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Now, let's come to Health Insurance.
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Everyone at home should have health insurance
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you, your spouse, kids, parents,
and everyone should have health insurance.
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At least Rs-1,50,000-Rs-2,00,000 for everyone.
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If anything happen to anyone, then Rs-1,50,000 - Rs-2,00,000
the bill becomes.
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So, per person should have around Rs-2,00,000 of life insurance
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it can be less if you can't afford it now.
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Better than not taking insurance, take Rs-1,00,000 at least.
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At least Rs-1,00,000 per person of insurance should be there.
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By doing this you get Life Insurance,
Critical Illness, and Health Insurance
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so your insurance needs are over.
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Now a combination of Insurance and Investment, money back
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premium waiver, you don't have to go with these complications
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take one or two policies for everyone and you are done.
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So out of 6 steps, your first 3 steps of financial planning are over
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half of your financial planning is done.
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So, now you'll think it's not that difficult, but easy.
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Now let's talk about the most important step.
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Fourth, which is your investment.
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So what are the investment options
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you can invest in equity, you can choose stocks
or mutual funds there
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after that, it's important to diversify in gold
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besides that, there is real estate.
So let's talk about them one by one.
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Equity, and in equity stocks and mutual funds
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my personal advice for most the people is,
if your retirement is far away
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and your goals are also far away
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if there's time for a kid's marriage and time
for their education expenses
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so you must get a little exposure in stocks.
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How much to take and in which stocks, you can
consult it with any financial planner
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these types of financial planning services were
we do your risk profiling
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that how much money should you invest, in which
stocks and mutual funds, which we provide
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in our Finbox service. Which you can join
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by going on the link in the above card and in the description
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by reading more and knowing about it
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you can call us on the number on your screen,
to know about this service.
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But it's not necessary for us or anyone's help
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if you are confident, that you can pick good stocks
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so you should invest yourself, don't take
anyone's advice, not even ours.
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And if, I understand that some people are
not confident about stocks
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they don't want to pick themselves or take anyone's advice.
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In that case, you must invest in mutual funds
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one thumb rule here is, as your
are earning around Rs-50,000 a month
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then at least of it's 20%, which is Rs-10,000
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you must put in some investment instrument.
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Which are Gold, Real-estate, Mutual funds, or Stocks
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if you earn Rs-50,000 a month, then you must
invest Rs-10,000 in these four combinations
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if more then it's much better.
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If you want to invest in stocks by someone's advice,
then it's very good.
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If not, then you should definitely invest in Mutual funds
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it's that asset-class, which will give
more return than gold and real estate
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and is more tax friendly.
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So mutual funds are a must for everyone, if
stocks then it's much better.
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Second comes gold, everyone should invest in gold
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and it's the best way is not by buying gold jewelry
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it takes making changes and when it's
melted there are deductions
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many more complications and returns are not good.
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If you are taking gold for investment, then
the best way is Sovereign Gold Bond.
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Were as much the gold price appreciates, you'll get that return
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and you will also get 2.5% fixed annual return.
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To know about this Sovereign Gold Bond, must watch this video
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the link is in the videos description.
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This Sovereign Gold Bond, according to us,
everyone must take.
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So your gold investment is done through Sovereign Gold Bond.
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After this comes Real-estate.
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Indian people loves gold and real-estate
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but according to me, real estate is not as
good of an investment as it sounds
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it sounds good because we take it and leave it for years
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were in stocks and mutual funds, we make changes every year.
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So returns don't gather and the compound doesn't happen.
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We leave real estate for 20 years, that's why returns are good.
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So I think, you should at least take one house in real estate.
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When you take your first house with a home loan,
then you get many deductions
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home loans are very cheap. they are almost negative in cost
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if you adjust it with inflation, then the interest
rates are almost negative
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after tax deductions.
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Everyone must take one house for their living
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and you can take it with a home loan.
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If you have a business and you need a permanent shop or office
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so you can take an office for your business and profession.
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Besides that, real estate for investment purposes, I don't like.
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First paperwork headache
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wealth tax, property tax headache, fear of being captured
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maintenance, moving and sending tenant
and headache of doing repairs for them
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if you count them, the returns is real-estate is not good.
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If you do full-time real state, then that's another thing,
then you will make a good profit.
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But you bought one or two houses, put them for rent
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occasionally bought them, then sell them
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you will not make money that way, so don't go into that mess.
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Real estate for office and your living is good
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but not good for investment.
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So now your investment plan is cleared.
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But there's one doubt, how much do you spend on stocks
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how much on mutual funds, how much on gold.
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This depends on your individual goal, aim, and needs.
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If I give a thumb rule, that won't be right
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because we tell this after we do risk profiling of everyone
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but between these three, it's important to have some allocations.
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Take 3 mutual funds and take Sovereign Gold Bond
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how much can you do, that I leave to you, because
I cannot give any thumb rule.
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So this is your investment plan, simple
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if you do stocks then good, if don't then 3-4 mutual funds
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Sovereign Gold Bonds and a home for
your living with a home loan.
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Now let's talk about tax planning.
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Tax planning is need for those who makes
more than Rs-6,00,000 a year.
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So if you earn less than that, then you don't
need too much tax planning
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you will get a deduction on your kid's college fees
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you'll get a deduction on some expenses and on LIC policies
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and if you invest in some tax savings funds,
then you'll get some deductions.
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If your earnings are more than Rs-6,00,000, then you
need do good tax planning, there are many steps.
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Use 80 C fully,
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where you can save Rs-1,50,000 on mutual funds
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buy life insurance and can show your incomes less.
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So in you make Rs-7,50,000, then Rs-1,50,000 will go
in your 80 C and won't be counted in your income.
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You take an NPS of Rs-50,000, you'll get a deduction there
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you'll get Health insurance deduction, home loan deduction
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so take all these deductions.
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Your tax will be reduced and you'll make good savings
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and this tax planning is not that difficult.
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I've made a video on full tax planning, must watch this video
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you will understand how to do tax planning.
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After this comes to the last thing, which is Retirement planning.
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So retirement planning is very simple, you just see
your today's expenses.
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So think, there are 15 years left in your retirement
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so from today put that much money in NPS
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that you get Rs-55,000 after retirement.
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So you just have to open an SPI calculator, you can open it on Google
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there you see, how much will you invest from this month
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and that will increase by 10-11%, which
NPS return gives around 10-12%
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you take around 10 or 11.
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So you invest that much money, which will increase by 10-11%
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after 60 years, with an annuity plan, if you
take the annuity plan of that money
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you will start to get Rs-55,000.
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If you do all this, then your 6 steps financial plan is over.
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And you secured your life.
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So this is that simple, don't bring that many complications
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you must keep instruments as small as possible
and make less paperwork.
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If something happens to you, then your family
can keep and understand those papers
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and you take advantages of the insurance.
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It's important to keep thing simple.
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A good financial plan is that, which is simple.
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Now your planning is complete
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you took 3-4 mutual funds, 1-2 tax saving funds
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you took Sovereign Gold Bond, NPS,
one health insurance, one life insurance
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and kept six month equal money in savings account
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where you can get FD like returns in emergency funds.
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If you have done all these, then your financial plan is complete
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and it's that simple.
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If you enjoyed this video, then definitely like it.
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And if you haven't subscribed to this channel yet
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so for more financial guidance like this,
subscribe to this channel
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and also press the bell icon.
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And if you want us, to ready your financial plan
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according to your needs, risk profiles, and your goals.
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Then you can subscribe to our financial planning service
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Finbox
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You'll find the link, in the videos description.
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Hope you liked this video
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I will be bringing more such videos.
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until then, to stay connected with me
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you can follow me on Instagram, Twitter and Facebook
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the IDs are on your screen.
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I'll be bringing you more such videos.
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Until then, this is Pranjal Kamra
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signing off, Bye Bye.
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