Mistakes You Make In Thirties Which Can Prove Costly
By - IndianMoney.com Research Team 30 November 2016
You are young…just finished your 31st Birthday and getting ready to enjoy life. Yes….youth in the peak of health, must enjoy life. Enjoy yourself, but do so responsibly and not at the cost of your finances. Mistakes you make at this young age, could mean suffering across your life.
Not investing through SIP
You have heard the phrase, “Little Drops Of Water, little Grains of Sand, Make the mighty Ocean and The Beauteous Land”, what does this phrase mean? Systematic Investment with thoughtful planning and hard work, leads to immense wealth. What is an SIP? In an SIP, a fixed sum of money say INR 2000, is deducted each month from your bank account and invested in a mutual fund scheme of your choice, on a particular day of the month. Since the amount gets invested automatically at fixed intervals, the chances of you continuing the investment for a longer period of time, are high.
The BSE Sensex Languished at levels of 8000-9000 in the year 2008 and early 2009. It is now over 26000. Imagine the returns your investments would have generated, if you had invested in an SIP of a good equity mutual fund scheme, in the year 2008-09.
Not having sufficient health Insurance
Good health is everything, but life is unfair. Sometimes you will fall ill and land up in hospital. Now medical treatment in a reputed hospital can be very costly. Your pockets are empty in no time. This is why you need to have health insurance to pay your medical bills. What happens if you do not have sufficient health Insurance? It’s obvious; you would have to pay for a part of the medical treatment, from your own pocket.
Not availing term insurance
If you are the sole bread winner of your family, avail a term life insurance plan immediately. This term life plan provides your family with adequate income to enjoy a decent quality of life, in case of your unexpected demise. This is the cheapest life cover, you can get. To avail a term life insurance plan, you have to pay money called the premium. Depending on the amount you pay (premium), your family gets a sum of money called the sum assured. The term plan is valid only for a fixed time called the tenure of the plan. If you/policyholder die within the term of the plan, your family gets the sum assured. If you survive the tenure of the plan you get nothing.
Not investing at a young age
It’s never too young to start investing. The earlier you start investing, the more money you accumulate over time. Compounding helps you to earn return on return.
Borrowing more than requirement
Be very careful while availing a loan. Borrow only if you can repay the loan. Always make sure to first repay the loan with high rate of interest. If you do not pay your loan EMI’s on time, it affects your credit score. A low credit score may lead to rejection of your loan applications.
So enjoy your happy thirties…but keep both feet on the ground. Manage your finances and say goodbye to worry. Be Wise, Get Rich.
Under : Financial Planning