10 Commandments of financial investment:

Ten commandments of Financial investment:

 

1. Income minus saving should be expenditure: An old age saga that income minus saving should be expenditure but people are following the rule of income minus expenditure to be saving.                      

2. Save at least 20 percent of your income: When earning starts  right from the first salary 20 percent of earning should go on leveraged asset to get the benefits of compounding. 

3. Planning: Having a plan for my 4 financial goal viz children education, career, retirement and medical emergency funds .

4. Selectionof asset: The asset should have 4 C’s : Consistency, Conservative, Consumption and Creation. Asset created should be yielding income continuously like a water which flows regularly , useful for consumption potable and have ability of creation . 

5. Goal should decide  investment option: Firstly protection, than growth without risk, than growth with risk , risk and speculation. To explain my first goal is say for retirement at least I should have income which help me to have bear minimum income regularly without any risk ,cent percent sure. Once I am able to save than I can invest in other asset for luxury and comfort.

6. Locking retirement fund: Many a time a, parent’s who had made provision for retirement through ppf, Gratuity, tend to get emotional and use that fund for child career, marriage or fund for  business and than tend to suffer, lock them in asset which can’t be diverted Annuity plan could be possibility. Gardening water can’t be used for cooking. Similarly retirement corpus has to be utilized for retirement goal. 

7. Legal litigation: Many times the fund of retirement being invested in wrong instrument leading to legal battle for claiming for same. Right money ,right hand,right time and in right form.

8. Passive and guaranteed income: For retirement, need  is of income which is passive and guaranteed. When the bank opens at least 100000 should be deposited in the account without worry of any calamities like war, cyclone, disaster,etc.9. L

 

9.Laddering: Most important lesson is  Empire can’t be built in one day. You need to gradually add funds for your retirement fund and regularly review your retirement goal.

10. Create and Save principle: Asset should be first created and than only instalment paid in form of regular monthly installment. Only insurance has this option.