My Financial Resolutions for Year 2014
- I will not buy insurance just to save tax – Tax saving is only a by-product of life insurance. If this is your core objective, invest in a simpler and cheaper option like the PPF or ELSS.
- I will pare the number of mutual funds to 5-6 – Five or six funds can offer you all the diversification you need. Cut down on the clutter and get rid of the underperformers in your portfolio.
- I will exercise regularly to keep fit – Jog your way to prosperity. Good health doesn’t just bring down your medical bills but also your health and life insurance costs.
- I won’t invest in schemes promising extraordinary returns – The schemes that guarantee doubling your money in 2-3 months or pay you for conducting surveys are just various ways of cheating. Don’t fall for them.
- I will create a contingency fund – You can never be sure what life throws at you. Be ready for any eventuality by stashing 4-6 months’ living expenses in an emergency fund.
- I will assess my retirement needs – Find out how much you need to save for your retirement. Unless you put a figure to this goal, you may not fully understand the urgency to save for it.
- I will buy a cover for my house – A house is your most valuable asset. Protect it by taking home insurance. It costs as little as `2,500 a year for a house worth `50 lakh.
- I will not roll over my credit card bill – It is tempting to pay the minimum due 5% amount and roll over the balance for a month. But credit card debt costs 30-36% a year and the billing meter doesn’t stop there. Subsequent purchases attract a monthly 2-3% interest.
- I will opt for online trading of mutual funds, Ulips. – The direct plans of mutual funds have made this a compelling option. Get in touch with your mutual fund today for online access to your account.
- I won’t allocate less than 5% and over 10% to gold – Gold is a good hedge against inflation, but don’t allocate too much to it. The metal is likely to witness volatility in 2014.
- I will not buy real estate as an investment – Don’t be inticed into investing in real estate. The high interest rates mean you may pay 11-12% on the loan to buy an asset that rises by 4-5%.
- I will review my life insurance needs – The insurance you bought 5-6 years ago may no longer be adequate. Review your cover, taking into account your present situation and future needs.
Source – ET Wealth