We consult a doctor to find out our illness and take proper treatment.What about your personal finance? Have done Financial check up recently ? If not,start soon.A serious financial health check up will fine tune your savings and investments.
because,most people don't realise the problems in their personal finance matters.Financial check up can solve the following issues.
1. Lack of Planning.
Think,You spend a lot and save les s in a month.Not aware about the right investment options.Investing in fast doubling schemes based on references by friends,relatives or advertisements. If you face this situation,your savings are scattered,not organised.Here,you have to understand about your current situations and opt better investments which is regulated by government bodies such as RBI,SEBI or IRDA.
2.Too much schemes.
You may have various deposit schemes,recurring deposits,insurance plans and mutual funds.Too much diversification is dangerous.It will reduce returns and make personal finance matters complicated.Simplify your savings.No need to buy the shemes of all companies and attract confusion in due date or NAV.
Some people are buying insurance for the sake of agents.So,they are having shemes.But,calculate your insurance coverage.Lot of insurance shemes and less life and medical coverage will not match your insurance need.Here,you need term insurance.Dont mix coverage and plans in a single scheme.
People bargain for buying a material product,but not enquire about charges in a scheme.Recently,Unit linked insurance plans and it's allocation charges was a major discussion by IRDA and SEBI.Investing Rs.1 lac and initial deduction of 25% as allocation charge will not suit the investment purpose.Higher upfront charges cannot make an investment profitable.Better option is to consult a fee only financial advisor and prepare an investment plan for you.If an agent is focussing on commission and not revealing various charges ,you will not get the unbiased service.
4.Conservative money approach.
Low risky people prefer conservative investments such as fixed deposits and bonds.In reality, these instruments cannot beat actual inflation.Check the interest rate of your FD and cmpare it with the percentage of hike in your food expense and rising oil prices.Consevative approach cannot yield high returns.Examine the stories of wealthy people.Most of them created wealth by holding high yielding shares or properties.
5.Increasing liabilities .
Liabilities should be lower than assets.If your EMI payments rise periodically ,you are paying interest and not getting dividend.So,ensure reducing liabilities and increase assets.Because,only assets can yield returns whether it is shares,gold or real estate.So,save and invest instead of getting things done by liabilities.