After the recent announcement by the venerable Reserve Bank of India, about the consecutive 14 quarters fall of our own nation’s GDP to 4.4% from an impressive 8.9%, it’s time to think how are we going to safeguard ourselves financially out of this economical harsh winter? Most Indians haven’t faced a harsh winter almost all their life as hardly any elements of this country already have a harsh winter.
It is undeniable fact that Indian economy has truly gone directly into recession with the result of lesser job opportunities and downsizing. Among the latest India Today story tells in regards to a horror picture about the work market. If you’re developing a self exaggerated view about your task market potential, it’s time to have a reality check. Likelihood of an improved switch of jobs are receding fast. There may be situations that you might face a downsize without switching chance for suitable jobs. Just what exactly in the event you do? Hold on to your task, even if this means less pay.
Step 2: Check shelling out for Your Credit Card
Today most young Indians who’ve a reliable job have acquired the habit of experiencing several bank cards. They continue juggling the payment of credit card debt up against the purchases made. Once you’ve acquired the habit of shopping for against visa or MasterCard, it is difficult to emerge from it. Buying (mostly impulsive) is very addictive. Strong adverse situations need strong measures. Keep one credit-based card and surrender the rest of the!!!
Step 3: Reduce debts and when possible Shun Leverage
Young Indians today have various debts, mortgage loan, MasterCard outstanding bills, car finance, unsecured loans, and even educational loans. Most are double income families hence one and half income switches into repaying debts. It really is as if there have been no tomorrow. Buy today and pay later is a trap. Borrowing is using tomorrow’s income today.
When tomorrow’s income has grown to be uncertain, it’s time to reduce debt by postponing of shopping for assets and looking for opportunities to settle a debt from available savings.
Step 4: Relook at the insurance cover
Paying for car repairs, medical bills, unexpected thefts in a reducing income scenario becomes painful. Having protection plans for these is similar to doing the proverbial nine stitches promptly. Of course, it’s likely you have the nightmarish connection with losing profits in ULIPs, however that was an investment cum insurance product that you have fallen for, ignoring the actual fact that insurance is not investment but possessing a cushion for emergencies like repairs and maintenance, falling sick or ending up in an accident, that are situations which no-one expects but happens. The insurance is most readily useful in such situations without denting your savings.
Step 5: Take calculated and affordable risk
Risk-taking comes naturally to teenagers set alongside the elder ones. Also, taking risk is an integral part of a dynamic life. However, knowing one’s own risk appetite and risk bearing ability are essential. Taking risk is simpler in an evergrowing economy, as increasing income is a certainty. Not in a downturn, where in fact the income in the immediate future will probably fall. Hence the tendency to adopt unduly blind risk must be curbed.
Step 6: Your Assets should be According to YOUR PREFERENCES Creation of assets is usually to be associated with genuine needs rather than satisfying fanciful dreams. If an Alto serves your need then buying a sedan can continually be postponed. When a one-ton air conditioning equipment is cooling enough avoid two tons. If the two bedroom apartment is enough for the needs you have buying a three or four 4 bedroom apartment can be avoided.
Step 7: Asset Allocation is the main element to investment success
There are risky investments and without risk investments. You will need to choose a combo of both. Predicated on the mandatory rate of return and risk appetite you will need to create a secured asset allocation.
Asset allocation brings discipline to your portfolio. It stops you from tempting to time the marketplace. By rebalancing and maintaining the asset allocation periodically, you decrease the overall risk.
Asset allocation allows you to book profit when the markets are up and enables you to invest when the markets are down. Thus eliminates greed and fear and brings emotional balance to the portfolio management.
Economic cycles are part of life. It really is a saying in Indian Tradition that ‘sukh’ is actually accompanied by ‘dukh’, hence you need to be ready for both, the nice times and the bad times.