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[ Financial Planning ] How can we become rich? - IncomeNonstop



Every human being wants to become rich and theirs only one way by working hard. If in today's world, you earn 10k or 20k or 100k or 200k its not sure whether you will be rich or Poor. Your financial planning will going to tell you about this. So, Today we are going to talk about the financial planning. How can we become rich in long term. If you are 20 right now and when you turn 60. Then you will be Rich. How?

We going to talk about all the strategies in detail. We have to understand some principles before understanding this. Suppose there are two friends, a Friend which earns 10k per month and the other one earns 100k per month. But the person who earns 10k saves 5k every month and the one who earns 100k. Doesn't save anything and spend all the money.

As the times pass by and after the 40 years that person who used to save 5k every month can earn a lot using a compound interest. So he will earn a lot of money but the one who was earning 100k every month. How much he going to have? Only his current salary but the other one was also getting the interest on his saving. So this is financial planning. A way of becoming rich lets first understand about the investment how we should invest in right way.



Three different type of investments

The first one is in the Stock, the other one is Shares and the last one is Cash.
If you are earning x amount and want to invest it in saving. You can put that money in saving account or in fix deposit or you can withdraw it and save it in your home. That money wont get multiplied you will get 6 percent return from bank.

But if you check the growth rate of India and is higher than 6 percent then indirectly. Its a loss for you if you think of taking a interest from your saved money in share market. You invest the money for a long period of time and might get 12-20 percent return. See the stats of Coca Cola company. We can see that amount of growth in coca cola shares had in past. If you would have invested in the stock in the beginning or you parents would have. Then just think of the money you might have today.



Related: Top 5 ways to invest money in India [2020].


Next things is Bonds in financial planning

It can be government owned or Privately owned. Bonds is just like giving a loan to a company and you will get a interest on that.


Third thing is Cash

We should have some for emergency. Suppose we get in a situation, where we need urgent cash. Then what you going to in that case? Go for Bond, FD? Probably not or you can withdraw money from bank. But i am saying to save money in the bank and that why you should always have some cash.


Next is really bad in our country is Insurance

In our country people don't like to do insurance. You need to have medical claim and life insurance too. I will tell you the reason you may be earning a lot of money. But if your family gets a disease and due to this your job or business gets over. So your revenue gets stop that way you need insurance. So if you had an medical insurance, then it had all your problems gets reimbursed.



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There next is Life Insurance in financial planning

Financial PlanningMeans if something happens to you then your family gets save there via this life insurance. Suppose
you are earning Rs1 lakh a month and you are saving Rs 20000 a month or Rs 30000 and you spent Rs 70000. According to your status but if something happens to you then where you will get these Rs 70000 will after you. Your family living of standard will worse? so here life insurance will help you out in this. Suppose I earn Rs 1 lakh per month and Rs 12 lakhs per month and 12 lakhs * 20 means Rs 2 crore and 40 lacks. This much you can earn if negotiate and plan properly so do check the terms and plans and why it is for this much of time?

If somethings happens to you then all the money is given to your family. And if they put in a bank then the interest will be as much to run your family. Means if my income is Rs 1 lakh and if I will put the insurance money in the bank then. I will be getting the interest of Rs 1 lakh per month so that's why this is important. Some plans like LIC you need to check both the plan. There it says you have a life insurance and you need to invest in it too. Like above but if you calculate you will be getting the return vary less. So play smartly and understand all the terms and conditions wisely.


Next is Retirement Planning in financial planning

How I will be running my home after the retirement? So for this too they have a lot of plans in it. That If you are under 30 then you must have a retirement insurance. I too had this plan more things which is required to do take that. And one thing which is good this will reduce your overall costing. In flip-kart, amazon you have a debit card emi option so you need a product but you did not have a income for that. Suppose you need a product of Rs 50000 and the other product is of Rs 1 lakhs. You need the 2nd one but for the alternate you are having 1st one.

Financial PlanningSo you can buy the product in emi and about credit and debit card. Is credit card is good or bad well it is good. I personally don't use it, why I don't use is because if I am earning Rs 2 lakhs a months then. I could only buy a product in credit for Rs 2 lakh. Basically you don't have to pay any interest for 50 days. That If my credit card limit is Rs 1 lakhs and I want to buy a product. So the difference between credit and debit card is that in debit you get money from the bank and in credit. You get a loan from the bank. And the loan is interest free for 50 days and after that you need to pay them. The interest and the interest rate is too high.

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Now I did not pay them for 51 days then they will be charging me the interest for 51 days per annual. so now a days you have a option of auto-debit for the 50 days. so why you need a credit card. Lets understand you need not to give them money for 50 days and. If you keep money in bank for 50 days then you will be earning the interest of it. so if you want then do it but keep in mind to save yourself from the trap guys has a salary of Rs 20000 and there expenditure is of Rs 50000.

Financial PlanningSo they keeps on using the credit again and again so here they provide an option. if you have a credit of Rs 25000, then you need to pay Rs 5000 now and the rest in emi. But strategically you paid Rs 5000 now and paid an high interest on this means interest/12 months compounded. And you will be paying the same amount afterward. so you had a loan of Rs 1 lakhs and you paid Rs 5000 and you need to pay Rs 95000. And you will be charged interest on Rs 95000 and if will become Rs 1 lakhs again.

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So basically you are paying to them from your home. so this is how credit card works.  People get attracted easily to these schemes and gets trap in a web. I have a Rs 1.5 lakhs limit, and I can have anything now and this puts them in a trap. And if you are in a trap then have a personal loan and you can pay them easily at 18%.

Share this article if someone unable to do a financial planning. Then do send them this. Share with your family members as they think that LIC, in Rs 5 lakhs. You get Rs 5 lakhs so do calculate the plans before having it. I am not saying LIC is bad or good.

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