THE ECONOMIC TIMES WEALTH, JANUARY 28-FEBRUARY 3, 2019 >> pg 11INVESTOR CONNECT INITIATIVE

ASSET ALLOCATIONIS A MANTRATO ACHIEVEFINANCIAL GOALS

GURU SPEAK

STEPS TO DOWNLOAD ANDSCAN A QR CODE

Download QR code app on your phone

Run app and scan the QR codeYour smartphone will read the

code & navigate to the destination

'EXPERT SPEAK':HAVE QUESTIONS ONMUTUAL FUNDS?SCAN THIS QR CODETO SEND THEMTO US.

Scan this QRcode to registerfor an eventhappening inyour city.

Scan this QR codeto calculate theamount you need toinvest to achieve allthe milestones youhave set for yourself

The wordfinancialfreedom

could meandifferentthings todifferentpeople. Forsome it couldmean joy, while forsome it could meanindependence of choice andfor some it's a window of hope.

Planning for finances well in advancecould allow every person to enjoy financialfreedom, at least during his sunset years.

ILLU

STRA

TION

S:SA

CHIN

VAR

ADKA

R

PLAN WELL, PLAN EARLY IN LIFE FOR FINANCIALFREEDOM

Be disciplinedin yourinvestingpractice,review yourportfolio on aregular basisand rebalanceit if you findyour portfoliois deviatingfrom your plan

For the debt-equity ratio in yourportfolio, use the ruleof '100 - your age'

To decide on theasset class youshould invest inwithin yourinvestment horizon,use the rule of 72

Along with a goodfinancial plan, aimfor a conservativelifestyle, have controlover the family'sexpenses, aim for asavings rate of morethan 35% of totalincome and if youhave to take a loan,be judicious about it.

SOME RULES TO KEEP IN MIND

BE DISCIPLINED, SEEK HELPFROM FINANCIAL PLANNERSFOR A PEACEFUL RETIREDLIFE

Have anemergency corpus

Have a medicalinsurance for thefamily

Have a lifeinsurance in casethere are peopledependent on youfinancially

Have a portfoliothat is a mix of

equities, fixedincome, real estateand gold

Review yourportfolio regularly

Rebalance itonly when it'sneeded

Be disciplined inyour investingapproach

SOME IMPORTANT ELEMENTSOF A GOOD FINANCIAL PLANARE THE FOLLOWING:

P Chandrashekar

Financialindependence isnot rocket

science if youunderstand it well.

Below are some points that aninvestor could follow while planningfor the long-term with the help of agood advisor.

Start investing early in yourcareer: This helps in compoundingyour returns. Don't underestimate thepower of compounding.

Create emergency corpus: Assignsome corpus to liquid funds, whichcould help you during an emergency.

Allocate more corpus to equityfunds: Equity investments haverewarded investors by multiplyinginvestments in a relatively short spanof time compared to other investmentavenues. If one starts early, plansproperly and invests regularly, one cancreate wealth as planned in definedtime.

Adopt SIP route: Investing throughSIP has made it possible for investorsto bring about much-needed disciplinein their approach towards investment.

Plan your goals: Quantify yourgoals and set a time horizon, allocateenough time to make informeddecisions. Prepare your plans andstick to them. Do not panic whenmarkets are volatile; it would be betterwhen your planning is for a longerduration.

Track and review portfolioregularly: This is important if you wantto achieve your financial goals. If youare lazy in tracking your investmentsperiodically, you may fail to reach yourgoals in the long term.

Re-balance the portfolio: Assetallocation is a mantra to achievefinancial goals, approach a financial advisor and seek his help inrebalancing — if required.

Understand and manage risk:Understanding your own risk is extremely important in investments.Let the advisor provide informationabout the best product in achieving yourgoal within the defined time frame.

— The author is an independent financial advisor