We present four simple ways that will help you allocate your income efficiently to create wealth.
Each of us has a destiny to fulfil in our lifetime. Often, while we chase our personal dreams, we must also look after the needs of our loved ones who depend on us. It can become quite tricky when you try to fulfil the needs of the present to have a stable future. A lack of financial resources can cast a pall over the future.
The time to act is NOW, with renewed effort to create financial security especially for the times when you may not be present. The first step often starts with saving money. The following are four ways to save money for future wealth:
#1 Save money by automating payments. At a time when digital technology goes hand in hand with the Government’s push for a cashless economy, it is wiser to automate your fiscal behaviour so as to encourage maximum spending. It can become difficult for you to balance your expenses and then come up with separate savings for investments, retirement, children’s education, etc. Thus, set up an ECS system where your bank automates your payments for savings, investments, child’s plans, etc. This way, you end up saving money from your income in a more structured manner.
#2 Invest in a savings plan.Savings plans are an effective way to inculcate the savings habit, as well as build a sizeable corpus for the future. The best savings plans in India today offer several options: Traditional participating life insurance with regular income, Traditional life insurance with guaranteed cash back every 5 years, Traditional life insurance that double the premiums paid and return the money in a lump sum when the policy matures, and Single premium ULIP plans with the flexibility to withdraw funds partially after 5 years and option to switch between 7 different funds for higher growth. Thus, you have differentsavings plans to create wealth for your future.
#3 Invest in market-linked investments. Merely saving money in the bank to earn interest will not create enough wealth for you. Investing your money will make it work for you even when you are not working. Do try out a few recommended market-linked investments, looking for a combination of equity and debt funds for maximum exposure over a longer period of time. The money from the investment can come in handy in times of financial emergency, or the fruition of goals like retirement, sending your child abroad to foreign university, etc.
#4 Buy health and life insurance.A major area of expenditure for most people is ill health and loss of income owing to illness or accidents. You can mitigate the high costs of ill health and sudden loss of income by investing in health and life insurance plans. The health plan offsets the high costs of treatment and hospitalisation in India, while life insurance keeps your future goals in check and also bails your family out of uncertainty in your absence.