Time is Money or Money is time?

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at:  finplancoach@gmail.com)

Time is money or Money is time?

"Time is money says the proverb, but turn it around and you get an interesting truth. Money is time" 



Yes. Money is time.... Making money or not making money is decided by the time factor. Let's see how time plays the role of a benefactor and a punisher. Because the power of compounding is @ work very very silently.


Time Mantras for Money:

Mantra 1 - Time ripens Money:

Consider this classic example:

100 shares of INFOSYS issued in the IPO in 1993 valued at Rs 9,500 would have become 12,800 shares valued at a whopping Rs 4.15 crore as on March 31, 2011. This is an astounding annual compounded growth rate of  59 %, with a total gain of 464,422 %. Money too follows the law of nature; it ripens over the period of time.Power of compounding is @ work very very silently......

Mantra 2 - Time multiplies money:

Time can multiply the money multifold.... Take a look @ this example:

Three friends aged 50 review their investment strategy.

A started investing @ 30 years with one lac @ 15% returns. B started investing @ 35 years with one lac @ 15% returns. C started investing @ 40 years with one lac @ 15% returns.

Take a look @ the result; you will be amazed...@ 50 years

@ A would have got Rs 16,36,900

@ B would have got Rs   8,13,800

@ C would have got Rs   4,04,600

With identical investment and returns, A got 4 times more of C and 2 times more of B. And the difference in time is about 10 years and 5 years respectively.

The time made all the difference...

http://mymoneyavenues.blogspot.com/2011/02/amazing-story-of-three-friends.html 

http://mymoneyavenues.blogspot.com/2011/02/amazing-story-of-three-friends-part-2_2996.html 

http://mymoneyavenues.blogspot.com/2011/02/amazing-story-of-three-friends-part-3.html 

Mantra 3 - Time rewards planners:

It's very true that we are all busy with our work and careers. But it's important that we spend some time to make our financial plan. Time surely rewards the planners. In the previous example, we saw A starting @ 30 years, B @ 35 years and C @ 40 years. Just by planning early, A got 4 times of C and 2 times of B... That is the reward Time gives the people who plan well.

Mantra 4 - Time punishes procrastinators:

While Time rewards the planners, Time is also ruthless in punishing the procrastinators. In the above example, C makes 4 times lesser than A and B makes 2 times lesser than A. The difference is huge and massive considering the fact that the investment amount and the returns are identical for all the three. But the difference here is the TIME.



That's why I said Time is ruthless in punishing the procrastinators.

Mantra 5 - In all, money is time:

 

We have demonstrated examples to show Money is indeed Time... Money is best managed if started early; time can be highly beneficial for early starters. Time can also be ruthless in punishing the procrastinators. That's why Money is Time because the power of compounding is @ work very very silently.

Call the experts @ Money Avenues to make time work for you and for your money's advantage.

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at:  finplancoach@gmail.com)

Achieve financial freedom in a week......

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at:  finplancoach@gmail.com)

Achieve financial freedom in a week...... YES.... In a Week...

Day 1: Review your life insurance cover

 

Review your insurance cover comprehensively.... Human life is invaluable. But, life insurance is the legacy one leaves to his family in his absence. Therefore, @ any point of time a person should be covered atleast 10 times of his annual income to ensure his family is fully secured always. Let's assume, If the annual income is Rs 10 lacs, the person should have Rs 1 Crore cover.

Day 2: Review your Health insurance cover

Review your health insurance cover for your family. Health costs are rising up and If the cover is provided by your organization, review the adequacy of the cover. Nevertheless, It's always better to have an additional cover which will be handy during the times of crisis.




Day 3: Review your saving habits:

• Am I saving the right way? 
• Is my saving = my EMI ?
• Is my saving getting invested the right way?

Some thoughts on the savings....




Day 4: Review your investments:

• What am I doing with my savings?
• Is my money lying idle in the bank earning dismal returns?
• Am I investing a regular sum every month?
• Can my money work harder to earn better returns?
• Am I investing my money rightly?   

Remember, saving your money is just one part.... But the most important aspect is investing your money rightly.....




Day 5: Review your financial goals: 

• Have I identified financial goals to achieve?
• Are the goals on track and in order?
• Do I have a goal for my child's future?
• Do I have a goal for my retirement?
• Have revisited them recently?
• Do I need to make changes?

Day 6: View or review your financial plan: 

• Do I have a financial plan for my financial freedom?
• Do I have a plan for my child's future?
• Do I have a plan for my retirement?
• Do I have a comprehensive plan to support my financial goals?

Day 7: Else, Call a financial planner NOW: 

When time is the constraint, work is hectic and financial planning is such a maze, it is tough to really focus and do such a comprehensive review... Leave this to a financial planning professional who would this job of assisting you in making a financial plan and make your money work as hard as you.......

 

You do your work, let the financial planner do his work on your quest to financial freedom.......

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at:  finplancoach@gmail.com)

Financial planning for 55/45 life situations...

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at:  finplancoach@gmail.com)

"At the end of the day, this was still a 55/45 situation" 

"And so if it turns out that it's a wealthy, you know, prince from Dubai who's in this compound, and, you know, we've spent Special Forces in -- we've got problems" -- US President Barack Obama's comments post Osama's hunt....

President Obama's comment sums up the life message. Life will offer 55/45 situations and we can still be successful if they are handled the right way; that the life never gives us opportunities which can be 100% sure; they always come with an element of uncertainty. But the key message is the conviction; though he gave a 55/45 chance even when it was decided to go for the mission. Of course the mission had a precise GOAL & TARGET and a  METICULOUS PLAN and RELIABLE RESOURCES to back it up. The result is there for all of us to see........ 

The key takeaways from this are a) setting precise goals b) setting precise targets c) reasonable forecasts d) constant tracking e) employing the best resources for the task.

Same principles apply in our lives too.. None of the situations offer 100% chance. It can be 55/45 situations many a time in our lives. But one should never fail to plan for situations which occur in our lives... Without planning  is like saying we'll land there and plan for the operation....

Financial planning is a tool which is a must for any life situations; be it 100% or 55/45....

1. Setting precise financial goals:

First basic ingredient in making a good plan is to clearly set the goals.. It can be your retirement, or your child's future planning or owning a home or any other goals.. And they must be very specific and measurable goals in order to achieve them financially.

2. Work on precise targets:

 

Goals should have measurable and time bound targets to make them meaningful and worthwhile. The entire financial planning concept works around the goals and targets. Some of them could be: buy a house in next 3 years; plan for child's education - 10 years; retire in 15 years... So on

3. Reasonable forecasting, a must: 

However uncertain life may be, we still can reasonably forecast our needs and wants, if not accurately. It's important that we spend some time and do home work  to understand our needs and wants, which will form the basis of our goals and targets for the future.

4. Keeping an eye, always:

It's highly important that you keep an eye always on the goals and targets after identification; because they keep changing over the time as the life in general has become very dynamic. What you planned 5 years ago may not be relevant today. It's better one keeps reviewing the goals and targets just to check if the plans are on sync with them.


5.Engage a professional financial planner: 

Financial planning is best left to an expert, whose job is to assist the clients on their future planning. It's true that you are very very busy in your work and profession, which leaves little time for your personal financial planning. Remember, planning is one part of the process, but tracking is a critical part in the on going process.

Only perfect financial planning will safeguard you for the 55/45 situations in your life...

(The author is a financial planning coach, founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail him at:  finplancoach@gmail.com)

iSHIELD your financial future in seven ways....

(The author is a financial planning coach. Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail at:  finplancoach@gmail.com)

iShield your financial future:

Inflation is on fire...The recent rise in fuel prices came as a rude shock for the common man and affluent alike. On the face of it, the rise is in only in the fuel prices. But the cascading effect will be felt all across the economy in various spheres. The rise can be felt in our day to day life starting with our food and vegetable prices, our daily commute and other services which are utilized. That's the impact of Inflation. When we look to plan our financial future we must consider the effect of inflation on our plans very carefully. Consider the following examples:

• Cost of college education now assumed @ Rs 7.5 lacs; after 15 years Rs 61 lacs.
• Cost of foreign education now assumed @ Rs 15 lacs; after 15 years Rs 1.23 crores.
• Wedding cost now assumed @ Rs 7.5 lacs; after 20 years Rs 1.23 crores.
• To retire now if one needs Rs 25 lacs, after 20 years Rs 4.10 crores.

The above future costs are based on assumed expected rates of growth of costs over the years and they are present a fair picture of things to come.

India, as we all know is on the verge of a viable long term economic growth journey. In any growing economy, inflation tends to be on the higher side given the fact that the consumption and spending increases substantially alongside the vibrant economic growth.



iShield or inflation shield your financial future in seven ways: 




1. Money should work as they do not grow on ZZZZZs:

Money neither grows nor beats inflation if it sleeps in a bank A/C.. Money should be deployed effectively to earn higher returns and most importantly should be able to beat the inflation over the longer run...After all its your money and it should work as hard as you.

2. Start investing early:

It's important to start investing early as the power of compounding (POC) is @ work very very silently.... POC is an effective and powerful tool to tackle the rising inflation and make better returns over the longer horizon. 

3. Start investing rightly:

 

Starting early alone is not important; the investing should be done rightly to take the long term advantage.

Consider this classic example:

100 shares of INFOSYS issued in the IPO in 1993 valued at Rs 9,500 would have become 12,800 shares valued at a whopping Rs 4.15 crore as on March 31, 2011. This is an astounding annual compounded growth rate of  59 %, with a total gain of 464,422 %.

Just investing is not enough, investing right is important to beat inflation and earn higher returns.

4. Fully insure @ the earliest and do it NOW:

Fully insure your and your family's health and life to the fullest possible extent and at the earliest. The delay will come at a definite cost owing to inflation and the age factor. Buying insurance @ early stages gives you the benefit of higher cover @ a lower cost...

5. Secure Children's future NOW:

 

Consider these points:

• Cost of college education now assumed @ Rs 7.5 lacs; after 15 years Rs 61 lacs.
• Cost of foreign education now assumed @ Rs 15 lacs; after 15 years Rs 1.23 crores.

The future cost of education could be mind boggling... both Indian and overseas. Its ideal to plan right now to tackle the future costs very effectively.

6. Secure your retirement NOW:

To retire now lets for a moment assume if one needs Rs 25 lacs, after 20 years the same would translate to Rs 4.10 crores. And that's inflation for you..... So start the plan now....

7. Make your financial plan NOW:

 A disciplined and well thought out financial plan outlining your financial goals and objectives is the right tool to take on inflation which is purely not in our control... A well made plan can fairly take you to the planned destination.

Rely on a financial planning coach to make a sold financial plan outlining your financial goals and objectives to take care of your financial future...

(The author is a financial planning coach. Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Mail at:  finplancoach@gmail.com)