High salaries, fast lifestyle and latest gadgets are normal characteristics of the life of Indian youth in recent times. High economic growth rates have thrown up tremendous set of opportunities to earn and show talent. As a result the youth is working harder, smarter, earning a lot and spending it leisurely. Indeed a great situation to be in.
So, how does financial planning come into picture? How many of the young workforce out there has heard about the magic of compounding? Chances are great that most of them will be unaware of this vital component of a secure financial future. We have many more Financial Planning Help Articles Now Available.
Investing right and investing young is the mantra of accumulating wealth over a period of time. Even a small sum of Rs.500 invested early in proper investment vehicles will result in a big fortune over time.
It is ironical but true that it is not very uncommon to find young professionals having good salaries, with little or no financial security & ridden with all sorts of debts. Lack of knowledge regarding importance of investing early and various types of investment opportunities available takes it toll on the immediate as well as long term financial future.
For example, how many of credit card holders know that the interest rate charged on the cash withdrawal or outstanding balances using it carries an interest rate of around 40%! Credit card is visualized as easy money and cash withdrawals, paying only the minimum due is rampant practice among credit card holders and this is one of the major reasons of falling into debt and worsening credit ratings.
How does financial planning help in such a situation? First, it helps you understand the pros cons of various financial investment products like term insurance, ulips, fixed deposits, mutual funds, stocks, real estate etc. and helps you choose one according to your risk profile. Secondly, it helps you enumerate your financial goals- both short term and long term and plan your investments in such a way that you are able to fulfill your financial goals. It also helps you understand the cost of borrowing via various financial instruments and their impact on your financial future.
Starting early on the right financial track can be the difference between a successful and rewarding financial future or a debt ridden and insecure life full of financial difficulties. We have many more Financial Planning Help Articles Now Available.