How to be Financially Independent this Independence Day?
Consumer Tips

How to be Financially Independent this Independence Day?

Financial freedom ensures that you don’t have to depend on someone else for your monetary needs in the present or future. You can ensure financial security, by choosing to invest your earnings in the right investment options, like Fixed Deposit, mutual funds, or Provident Fund. Plan your returns from these schemes, while balancing your long-term and short-terms goals. This helps you make all the more difference to achieving financial freedom.

For example, you can choose short-term investment options such as FDs to gain secured and high returns in a timeframe of 1 to 5 years. This can help you pay for your child’s education or buy an asset like a home. Balance such investments with high-earning long-term investment options like government bonds to fund your retirement with equal prowess. By planning your finances smartly, you can become financially independent in no time. Read on to know 4 tips to do this with ease.

Equate your goals for financial freedom with the value of the rupee

Inflation is a reality that you cannot dismiss. So, when you seek financial freedom, list down your goals alongside the timeline in which you see them getting fulfilled or want to achieve them. Now, add a 10% extra cost for each year to all the prices you calculate at present for these goals.

For example, if you list your child’s wedding as a goal and estimate to make it happen in 10 years, based on the average cost of a wedding at present, add 10% extra for each year. Thus, when you start saving today to beat future inflation, you are bound to be free of financial shortcomings in the time to come.

Invest as per your financial goals

Random investment will lead to incorrect asset allocation, which will not yield beneficial results for you over time. So, plan your investment by keeping in mind several factors such as your age, income, risk appetite, goals, expenses, and future objectives. This type of streamlining will help you choose the right mix of assets in your folio.

When these investments mature, you can use the money to buy a car, purchase a property, invest in expanding your business, and fund urgent hospitalisation and medical needs. Make sure that you also consider life events like retirement, weddings, or having a baby as well as tax saving while chalking out a financial plan. This will help you keep your goals realistic and practical.

Get freedom from financial difficulties by choosing the right assets

To put your plans to action, you will need to back them up with a steady investment portfolio. Based on your risk appetite you can choose a mix of investment options. Choose high-risk high-return mutual funds and shares to gain more than 10-12% interest on your investment. Ensure that you invest in an FD or ladder your FD investments to gain assured earnings with zero to low risk.

You can use several asset calculators such as FD Calculator to decide on the amount you want invest in each instrument. This will help you estimate your earnings clearly. The next step will be to choose the right issuer for your investments to gain better returns over time.

For example, if you choose FDs from trusted issuers like Bajaj Finance, then you can maximize your returns on investment like no other. Awarded ICRA’s MAAA (Stable) and CRISIL’s FAAA/Stable Rating you can choose both cumulative and non-cumulative Fixed Deposits from Bajaj Finance and gain high interest rate returns of up to 8.75% on your investment. Ensure that you create a balance portfolio for the best returns, and keep revisiting it each year.

Inculcate the habit of investment to free yourself of financial worries

In order to gain financial freedom, apart from everything else, you will need to be patient about your savings and investments. The market is called volatile with good reason, so when you have market-linked investments in your folio, do your research or consult an investment advisor.

Take on some risk to grow your wealth, and make sure you also have risk-free options in your kitty, such as FDs and PPF. Last but not the least, ensure you are disciplined with investment and savings. Stick to the plan you have devised and you’ll see your money grow over time.

This Independence Day, as India steps into her 72nd year of independence, you can also take a pledge to gain financial independence to secure your and your family’s future.

Disclaimer: The information provided here should not be seen as investment advice, it should be used for informational purposes only