Cover Miles » financial plan Choosing the Right Path Tue, 28 Oct 2014 13:27:15 +0000 en-US hourly 1 Financially Plan and Make a Difference in Your Child’s Future Mon, 12 Mar 2012 17:47:51 +0000

On a beautiful late spring afternoon, twenty five years ago, two young men graduated from the college. They were very much alike, these two young men. Both had been better than average students, both were smart and both were filled with ambitious dreams for the future. Recently, these men returned to their college for their 25th reunion. They were still very much alike. Both were happily married. Both had a kid. And both had gone to work for the same industry and held similar positions in different companies.

But there was a difference. One of the men’s kid has completed M.S from a reputed university in USA and the other kid has completed a graduation from a local university. What made the difference?

Have you ever wondered, as I have, what makes this kind of difference in our kid’s career? It is a carefully thought out long-term planning for kid’s future.

As a responsible parent, you would not like to compromise on your child’s career, regardless of rising cost of education. You need a well developed investment plan that will allow you to meet all expenses for your child’s future.

child plan Financially Plan and Make a Difference in Your Childs FutureProvision of Medical Expenses

Health care for mother and child will be a potentially handsome expense for new parents. New babies require regular checkups and immunizations even though if your child is in good health. So you need to make provision for these expenses well in advance even before the arrival of the baby.

Adding the newborn to your Mediclaim Policy

If you have an individual mediclaim policy, add the newborn as a member in that policy and get coverage. Do you have an employer provided mediclaim policy? Then, check if the terms and conditions allow you to add the newborn for coverage. If it allows, then add the newborn to that policy. If it doesn’t allow then take an individual mediclaim policy for your kid.

Increasing your Term insurance coverage

You need to check whether the existing insurance coverage is sufficient to support your child’s future or not in case of any mishappening to you.  If it is not sufficient then take term insurance policy for the gap.

Ongoing educational expenses

The educational expenses are skyrocketing year on year.  What your father has spent for your college education, is now you need to spend for your kid’s primary school education. So adequate provision in your monthly budget and a projection for cash flow with reference to school education expenses will be an important exercise for you

Financial Planning for Higher Education

It is going to be a biggest financial shock for you, if you have not properly planned for your kid’s higher education. Don’t delay this plan, start this plan as soon as the arrival of the newborn. Then you will have time on your side.

Assume your kid has completed today his/her schooling. Imagine how much you may need to spend for higher education at today’s costs. This cost is going to go up year on year because of inflation. So project this cost with inflation rate for the future. Now you will know how much exactly you may need for higher education in future when you kid is actually completed its schooling.

Other dreams for your child

Apart from the higher education, you may have some other dreams like buying a home for your kid, corpus setup for your kid’s future profession or business or corpus creation for wedding expenses. You need to follow the similar steps as mentioned in ‘Financial Planning for Higher education’ for these dreams also.

In case you don’t have time or knowledge to do this financial planning you can seek assistance from professional financial planners. They will save your time and make sure that you are achieving these financial goals for your kid.

Savings account for your child

You can open a savings account in the name of the minor. Whatever gifts, the kid receives by way of cheque or cash on the occasions like birthday can be saved there. Also this account can be used to motivate the kid to save from its pocket money.

The other investments which you make for your children’s future like mutual funds or shares need not be invested in the kid’s name. Banks, generally, will not give loans against shares or mutual funds held in the name of a minor. So, it can be invested in your name. As and when required it can be encashed to meet the necessary expenses for the kid. Banks, generally, will not give loans against shares or mutual funds held in the name of a minor.

]]> 0 The First Step to Financial Success / ABC of Financial Success Thu, 11 Aug 2011 11:15:57 +0000

When we have a desire or dream which is not yet fulfilled or we have not taken any step to fulfill it, then it becomes an incomplete cycle.

Every incomplete cycle, in some way or the other, keeps troubling us from within. There is a continuous and constant sense of incompleteness.

Really, it is a kind of mental frustration. Either discharge the desire, or take the first step or next step to fulfill it. Don’t let it unattended. Every incomplete cycle drains you of your energy, leaving you weakened and exhausted.

financial success1 The First Step to Financial Success / ABC of Financial SuccessThat’s why it isn’t the day we worked a lot that tires us, but the day when many things remained incomplete that makes us tired.

Financial goal setting, organising our personal finance, doing our tax planning in the beginning of the financial year, preparing for a meeting with a financial planner are incomplete cycles for most of us.

“There are people who make things happen, there are people who watch things happen, and there are people who wonder what happened. To be successful, you need to be a person who makes things happen,” said James A Lovell.

Let us start making things happen:

It has been well said that the journey of 1000 miles starts with the first step. Most of the financially successful people started their journey with the conception of a financial goal. Setting of financial goals influence the way we think and act, helping us to achieve our goals and turn financially competitive. In addition writing our financial goals, gives them a concrete shape to focus on achieve them. Let us have a look at how goal setting methods help.

Here are some universal truths about financial goal setting that have helped most of the financially successful persons.


Most people have failed at financial competence, not due to lack of talent but loss of purpose. This is very true that once our financial goal is set, we start thinking and investigating ways to meet our long-term financial obligations. We start finding out interest rates in banks and companies, the rate of appreciation in gold and property, the appreciation in mutual funds, shares and stocks and the risk factors of each investment. Setting of goals diverts our mind effectively towards narrowing the financial difference towards our financial goals.


financial success The First Step to Financial Success / ABC of Financial SuccessBy setting financial goals we get the right direction to travel for fulfillment. It has been rightly said that an idle mind is a devil’s workshop and a devil mind brings about bad or devil results. So once a sound financial goal like being financially independent after retirement is set, our perception would be diverted in the direction to achieve it. This would apply to eliminating and rectifying failures in our financial planning like investing in penny stocks. This focus also enlightens our mind to possibilities of setting aside losses and reorganizing our financial planning.


Desire is a motivating factor that makes fulfillment of financial goals a compelling reason. It is true for our beneficial goals would make us strive towards its attainment. Saving and investment for pleasurable goals like marriage of children, their higher education and financial sufficiency in retirement would definitely motivate us for achievement.


We all like challenges, for we aim to prove ourselves superior, and this applies to meeting challenges like financial goals. This is true; we all like challenges and like to prove ourselves successful. Setting financial goals like a comfortable retirement corpus makes us want to prove to ourselves that it is attainable. So we work hard to meet the challenges to prove ourselves worthy to others and ourselves.

Mind as a Magnet:

The mind gets magnetic to good financial saving or investment opportunities with financial goals due to a state of extreme awareness. Our mind has the capacity to focus more on goals that we set in life, and this applies to financial goals too. We then find opportunities that we may not previously have found as our mind works with a different perception of attaining of financial goals.

Financial goals nurtured lead to financial achievement:

To conclude financial goals are just like seeds sowed in all our minds. This goal in the form of a seed is nurtured with good financial opportunities that come our way.  With the nurturing of financial goals (seeds) being important we are motivated to avoid harms like bad investments that could harm the growth of the financial tree.

With the desire to see a full grown healthy tree of financial sufficiency makes us make regular savings and investment. Lastly facing the challenge of a healthy financial tree makes us be extremely aware of opportunities to ensure the best-grown financial tree.

Let us take the first step to be financially successful, by setting our financial goals today.

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Instruction Manual for Investing Sun, 24 Jul 2011 09:47:28 +0000

Let’s open the manual:

Every gadget you buy in the market comes with an instruction manual or users manual. But your salary, savings…retirement don’t come with an instruction manual.  So we don’t know how to handle these and we end up mishandling. The result is poor investment choices and unhappy retirement. This article is an effort to draft an instruction manual for our investments.investment tips 300x134 Instruction Manual for Investing

Investment forms an integral part of our work life, with many wanting to save and invest to meet our long-term financial needs. We would all agree that just living from pay cheque to pay cheque would leave us in a bad financial state making us incapable of meeting our family’s financial commitments and our expenses after retirement.

Don’t Fly Blind; Have a Financial Plan

It is vital to chalk out a financial plan at the very beginning of our career. This plan would tell us how much we should save and invest. This plan also ensures that our long-term financial needs are met. It may prove difficult and sometimes costly in the long run if we chalk out a financial plan on our own. So it is better to engage a professional financial planner, who would be in the right position to advice us on the investments to meet our long-term objectives in life.

Generally investment advisors or financial planners ensure that we invest in the right type of investments that are relatively safe and tax efficient. They ensure that our investments do not divert away from the set financial goal. The advisors or planners who charge a fee, can be expected to act in the best interest of us; their clients. But we will not be in a position to trust those who live out of the commissions earned from selling insurance policies or mutual funds or stock broking.

However, it is best for you also to be cautious and not allowed to be fooled by flattery. Since it is your money you need to be cautious and vigilant.

Do control what you can:

The first thing that we can control is unnecessary expense on investment. It is in our interest to try to minimize or avoid investment expenses like entry load, exit load, fund management fees, commissions for buying and selling stocks, account maintenance fees,  allocation charges, administration charges, surrender charges, and other overheads. Small drops make a mighty ocean. Similarly these small amounts of cost cutting will definitely pay us in the long run.

The second control is over the diversification of your investment. You also need to ensure that at all times your investments are done over a wider variety of assets. This will ensure that you do not suffer large losses in one type of investment. The losses in one would then be offset by the gains in the other and you will be financially safe at all times.

The third control is the maintenance of our asset allocation to reach our financial goal. We need to keep a check over the asset allocation or ratio of equity to debt and to other things in your portfolio with the help of a professional financial planner. This will help us ensure that we are not taking more risk than what we want or can possibly handle.

Do pay as little attention as possible to the financial media.investment manual 300x224 Instruction Manual for Investing

It is best not to be influenced too much by the media to buy and sell investments. Investing is not a competitive sport. Buying and selling stock frantically by being influenced by the media is counterproductive to your financial objectives.

It is best to understand that our conscious investment is for long-term wealth appreciation. So we should not be distracted by the investment shows that run 24 hrs a day, investment column they publish 365 days a year. Media doesn’t understand your requirements. So it is difficult to get a customized solution for your personal finance.

Don’t fall into “Invest and Ignore”

We have invested your precious savings, so do not be careless and sleep over it. Though our investment advisor would make sure that our investment grows, it is better that we too are vigilant and keep track of market conditions. It is our precious savings that we have invested. So if we lose it, we would be losing not only money but also our peace of mind.

Don’t fall into “HNI Trap”

Being a high net worth person exposes us to being influenced to invest in dubious projects that may bring down your financial status. This is true because the financial industry are on the lookout for people that have a lot of money and are of a high status. They try to influence them to invest in dubious projects appealing to their status and vanity.

Being a HNI doesn’t mean that you need a completely different set of investments. They try to pack something and will say “This is a HNI product”, just to massage your ego and get business. Many HNIs would be lot richer, if they could have bypassed their private banking department and just invested in an index and a very few diversified equity funds.

A final thought:

The instructions in the user’s manual need to be used to get the maximum benefit and long life of the gadget. Similarly, having read the set of instructions to make wise investment decisions, it is up to you to follow them strictly or leave it and go back to your routine life.

If you decide to follow these instructions, you will definitely see a lot of positive changes and financial prosperity in the long run. So today is going to be the first day for rest of your life.

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