We will go to doctor if you feel ill, isn’t it? Doctor will check your condition and suggests some medical tests and after analysing the reports, he will suggest you an advice! This process is to be done to check physical health.
But have you ever think of your financial health? It is a must and should exercise to be done at least once a year.If you have good financial knowledge, assess your financial well-being at least once a year. If you don’t have sufficient awareness on financial health, consult Certified Financial Planners(CFP’s) or trusted financial adviser.
Whether you are self assessing or taking the help of an adviser, you must be clear on your financial habits. They are-
1.Do you Have clear idea on investment avenues?- In today’s digital world, everything is under your finger tips. Even though financial knowledge is a vast subject, information is just a click away from yours! Thanks to the digital revolution! You can google any financial information, but treat this as information only, not as an advice to select a product. selection of product requires unique skill! It has to be developed, try to increase knowledge on financial products gradually.
2.Are you clear on your goal?– Goal setting is the first thing to do rather than selection of product. If you are clear on your goal, you can decide which product to choose to reach that goal. It entirely depends on the prominence of the goal to you. You should select products for different goals.
3.Are you sure of the time period to reach that goal?– As different goals have different timelines, you should be clear of the target date.
For example- if you are investing for your son’s college fees, it is a non-negotiable goal and the money would be needed definitely at that time.
While some goals can be extended and not important as-of-now. Example- Buying a mobile, T-Shirt etc. They can be delayed for some more time.
4. Are you prepared for retirement?- we can’t work life-long, we have to retire at some point of time! But have you ever think of the income sources during retirement? It has to be think seriously!
Some people are in misconception that their pension would take care of expenses during retirement, but this is a myth!Due to rising inflation and lifestyle changes, our hard earned money would wipe out! This is a fact!
5.Are you aware of the “Passive Income” ideas?- As we all have limited working career, our income stops at a particular period, but do remember our expenses won’t cease even though there is no income! They(Expenses) keep rising!
So we must create “Passive Income” which will take care of you even though you are not working! They are so many Passive Income ideas like creating youtube videos, writing blogs, creating revenue through digital marketing etc. They requires little bit effort and if they succeeds, you will earn Passive Income lifelong.
So assess the above 5 steps periodically to check your financial health! Financial well-being requires patience and skill. Develop them!