Create your life's financial rainbow...

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to mailfpc@ yahoo.com) 

Create your life's financial rainbow:

Rainbow is something wonderful which can be seen but not touched or felt by us. It's sort of an intangible creation by nature. Same is the case with planning our money in our lives. Money can get tangibles and intangibles, and many a time intangibles are long lasting and enduring... Tangibles like gadgets, cars, luxuries do fulfill the aspirations of the want seeking people. But only the intangibles take care most of your needs.


Need Vs Want

The debate of "Need Vs Want" has been evolving over the years.. Some of the wants of yesteryears are the need of the present. For eg., Mobile phones, internet. But a prudent person will focus on the needs of the life first...


The following are the seven rays, which are the essential needs for our future and they form our life's financial rainbow...

• Adequate life insurance cover
• Adequate health insurance cover
• Children's education plan
• Children's future plan
• Retirement plan
• Wealth creation 
• A Financial plan

1. Adequate life insurance:

Human life is precious and more so for the family dependent on him/her. Life insurance is a great tool to quantify the human life's value in financial terms. It is very ideal for one to have a life insurance cover of atleast 5 times of the annual income @ any given time. For eg., if some one has an income of Rs 10 lacs PA, the person should atleast have a cover of Rs 50 lacs which will be a good cover for the family on his/her absence. Remember,
Life's value for insurance purpose = Annual income * 5 times...



2. Adequate health insurance cover:

Health care costs are set to rise in the coming years, due to various factors. Advancement in medical technology, longer life spans, imbalanced life styles are key factors which will adversely impact the health care costs in the future. It's important that the family is well protected for such rises in health care costs. Ensure adequate health insurance cover for self and the family. Do not be dependent only on the cover provided by your organization.During the times of career shifts you will be left with no cover.



3. Children's education plan:

Next in the line is the financial plan for children's education. Education costs are skyrocketing now and they are expected to continue this way in the future as well. This again is contributed by rising ambitions among the children and the cost of such ambitions. It's important to have a financial plan for your children's education.

http://mymoneyavenues.blogspot.com/2011/09/beware-of-sky-rocketing-costs-of.html



4. Children's future plan:

Indian parents' responsibility does not end with children's education alone. It's beyond that.. Though one cannot predict the future social outcomes after 20 years, particularly on marriages, it's fair to assume status quo and plan them accordingly.It's important to have a children future plan.

5. Retirement Plan:

Coming years are going to be extremely challenging for this generation of professionals. Given the fact that the shelf of our working careers are getting shortened, we have very limited time to plan for retirement fund. In short, what we do in terms of financial planning over the next 15 - 20 years(stretched time frame) will determine the financial future for the rest of our life. It's important to have a retirement plan for our financial security.


6. Wealth creation:

Earning wealth is just one part of the story. And we all work really really hard to earn our wealth. It's equally important to put your money to good use. I always believe in the mantra that "You work hard for your money... Let your money work harder for you..."
Make your money earn better returns than what it earns now.. Remember, the world's wealthiest people are the ones who started with few dollars in their wallet.


7. Have a financial plan and a planner:

Our careers are always about challenges. Challenges to meet our targets both on personal and professional fronts. But unfortunately, professional front is immensely hectic, that we miss a lot on our personal front, particularly on the money management. Leave it to a professional financial planner, like Money Avenues and get on with your professional career. 


So what are you waiting for? Go ahead and create a perfect financial rainbow and it will give you a secured financial future.... Even if your life is faced with rainy days, there is a financial rainbow to guard you and your family...

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to mailfpc@ yahoo.com)