It happens with all the investors. As soon as they start earning they go to the bank and make a deposit. Cheers! They feel happy. Then they start getting lots of advice from several people as they go higher in their professional life. So they start tasting equity shares, insurance policies, etc. Just for tax saving, they buy LIC policies, ULIP policies, tax saving funds, tax saving FDs and provident funds. In 5-8 years’ time, there are already 10-15 things added in their kitty.
3 Questions for you
– Have you ever got advice from your parents & friends (or any other) about where to save?
– Have you started saving?
– Have you been saving for a long time?
If answer to any of these is yes, then, it is important for you to monitor your savings based on your goals. This exercise should be done annually.
Most Important Solution – Make your Asset Allocation Policy
You must have an investment strategy that attempts to balance risk versus return by adjusting the percentage of each asset in your portfolio according to your risk tolerance, goals and investment time frame. That is called Your Asset Allocation Policy.
5 Points – Step by step guide to make your own policy
With the use of asset allocation, you will be aligning your savings with your goals and simplifying your finances. You must make your personal asset allocation policy irrespective of the quantum of your wealth.
1). Set your personal goals like buying a home, children education, their marriage and your retirement. They could be anything but please write them on a paper.
2). Divide them into three categories – Short Term, Medium Term and Long Term Goals.
3). All the available saving options can be divided into 3 categories – Debt, Equity and Real Estate. Some provide fixed income and some are volatile. Similarly, some are for short term and some are for medium and long term.
4). Based on above three points, decide your Asset Allocation policy. If you are in your early 30s – 40s, put higher percentage in equity & hybrid, rest accordingly. If you are in your 50s, put higher in debt, rest accordingly. You may visit www.roboadviso.com to judge the right Asset Allocation for you.
5). Revisit your priorities, goals, liquidity, assets, liabilities etc annually and make changes to your Asset Allocation if required.
5 Benefits of Asset Allocation Policy – Believe it or not
– No need to worry about falling stock markets
– Higher control on your saving habits and assets
– Experience Wealth Creation
– More time to focus on your work
– More time to enjoy Life
To get your free asset allocation calculator, please visit Roboadviso at www.roboadviso.com or contact us at firstname.lastname@example.org or 9015615190.