3 Pillars to being Financially Healthy
- Undertake tax planning measures in both your income as well as investments. This means you should utilise all the tax exemption and reimbursement benefits detailed in your salary structure to the maximum. Similarly with respect to your investments, invest in those products which provide you higher post tax income.
These would help increase your savings and with the benefit of compounding, your investments would grow exponentially.
- Invest as per interest rate cycle. Markets move as per the prevailing interest rate cycle. When the interest rates are rising the equity market (shares) does well and during the same time the debt market (FD, Bonds, Debentures etc) provides lower returns.
When the interest rates start declining, the debt market does well and the equity market gives lower returns. Investing based on your interest rate cycles will maximise your RoI.
- Take risk mitigation steps. One should always take term insurance and health insurance to ensure savings and investments do not get impacted in case of any emergency / untoward incident. Setting aside an emergency corpus and diversifying will also help in mitigating risks.
