Make your Complete FINANCIAL PLAN in just 5 steps

Step 1. Emergency Fund

6 Months of your monthly expenditure either in Liquid funds.
eg. Monthly Expenditure – ₹ 25,000 x 6 = ₹ 3,00,000.

Step 2. Insurances

  • A person needs only two insurances – Term Insurance & Health Insurance
  • That’s it, no other insurances are required. Stay away from ULIP plans.
  • Term Insurance should be for the earning member of the family only.
  • Health Insurance – don’t include your parents in your health insurance as the premium is calculated according to the oldest person in the plan, take their plan separately.
    HDFC Ergo is suggested for both Health & Term Insurance

Step 3. Loans

While taking loans we must keep in mind which loans we can take and which type of loans we should not take.
Can Take: Housing Loan (80C Deduction) or Higher Education Loan (80E Deduction)
Should Avoid: Credit Card Loans, Personal Loans or Unsecured Loans (15%+ Interest Rates)

Step 4. Investments

  • Shares
    Only if you have proper knowledge of Ups & Downs of the market and can manage your emotions.
    Otherwise, choose Mutual Funds.
  • Mutual Funds
    Properly diversified investments linked to your goals.
  • Property
    Only if you are buying a house or office.
    No attractive returns in 4-5 years for now.
  • Gold – Only 5% of the total portfolio
    Not jewelry or digital gold only Sovereign Gold Bonds.

5. Tax Planning

  • 80C Deduction – Housing Loan
  • 80D Deduction – Health Insurance
  • 80E Deduction – Higher Education Loan

Disclaimer – This is our personal view and mutual funds and investments are subject to market risk. Please read all offer documents before investing. This video is only for education purpose.