#RTWThrive is an initiative to bring awareness in area of personal financial planning to achieve Financial Wellbeing. Learning to navigate and adapting to change is not only important, but it is essential to Thrive in life!
1.Buying Life Insurance as Investment product: Insurance is for protection and there are other products to serve the investment objective. Never buy insurance as investment product.
2.Investing in Bank Fixed Deposits: In most cases the post-tax and inflation adjusted return from the bank fixed deposits is near Zero! Invest in tax efficient and higher return instruments.
3.Investing in physical Gold: It makes no sense to buy and keep physical gold as this is only a hedge against inflation.
4.Buying a house you can’t afford: Never invest in a house if you were to pay more than 30% of your income as EMI. This will adversely impact all other goals.
5.Counting on your Employee Provident Fund(EPF) alone for Retirement: The retirement corpus considering inflation and longevity is way higher than what EPF can provide for. This is the biggest financial goal.
6.Investing regularly in depreciating assets: Fancy cars, yachts and mobiles will drain capital. Be careful and allocate capital to appreciating assets.
7.Looking for Stock Tips: Never look for stock investing tips. Research your investment ideas and build a winning portfolio of great companies with durable advantage.
8.Trying to time the market: No one can predict future of stock market over short term. It is time in the market and not timing the market that creates wealth.
9.Withdrawing from EPF Corpus: Always keep emergency funds equal to 4-6 months expenses so that you never need to withdraw from EPF.
10.Not Having a Financial Planner: The best thing you can do is to hire a financial planner to define your asset allocation and create a winning portfolio based on unique risk profile.
