Every individual who are livving on this earth needs “Money”. Whatever the currency may be the world is revolving around “Money”. Infact Popular sociologist Karl Marx Recalls- “Human Relations are all Financial Relations”. That’s the “Power of Money”
To survive in this world, everyone needs “Money”. So we shouldn’t ignore such relevant instrument. For that every individual has to do Financial Planning. Preparing financial plan doesn’t mean to be miser, but to plan your life stages well in advance.
Every individual has to pass through 3 stages-
- Accumulation Stage(22-40 years of age)
- Preservation Stage(40-60 years of age)
- Distribution Stage(60 and above)
Let us discuss this 3 lifestages in detail-
- Accumulation Phase– Usually youngsters gets job in this stage and they are almost financially independent. They don’t have any financial responsibilities at such age, does it mean you have to enjoy your life?No!
As you are financially free, you have to think over your future needs. Your earnings should be maximised for savings and investments rather than outings and entertainment.
As you have lot of time to accumulate wealth, it is the “Best Time To Start Investing For Your Future”. We don’t mean you have to invest all your money instead of spending on your needs, which you can’t compromise on! But set aside 25-30% of your income and invests that money in capital appreciation assets.
By automating your savings in your early stages of your career, you would develop it as an habit which would helps in financial emergencies in your future.
- Preservation Stage(40 Years to 60 Years)- In this stage you would be laid with financial burdens like childs education and marriage, buying a house etc.
In this phase you can’t take risks, the primary agenda at that time is capital preservation. Though you prefer to take calculated risks, your financial responsibilites won’t allow you to do so!
So be ready to plan for your future in the early stages of accumulation phase and preserve that capital before you reach 60(Distribution Phase)
- Distribution Stage- At this stage, you may be retired and all your financial responsibilites would be over.
During Distribution stage your financial obligation is to distribute wealth among your family members and lead a peaceful retirement life.
Human Relations are proved at this stage only. If you are dependent on your children for your basic needs, your life would be miserable.
At the same time, if you have huge corpus and are financially independent, you would be treated with “Honor and Love”
If you still don’t trust this, observe the people who are financially independent and financially dependent on their family members at tha age of 60, you would be surprised to digest the fact! That’s the “Power of Money” in Human Relations