It is already 90 days since the New Year, what have you done to your finances? Evaluate the financial health is the most fundamental things you must do before investing.
Someone who is financially healthy, generally know the condition of assets and debts, able to always pay the mortgage debt on time, and know how to use the assets and cash flows to achieve life's wishes. How about you?
The easiest way to find out the financial health is to do a financial check-up. This process can be done alone or in consultation with a financial planner. You will be invited to recalculate the amount of assets and the amount of debt currently held. In addition, you will also be required to inform the amount of your income each month and where the money goes.
There are five areas you should look to determine how healthy your finances, and how close you are to achieve your life wishes.
First is the emergency fund. Every person shall have an emergency fund at least 3 times the monthly expenses.
This emergency fund should be in liquid form of assets and the value is not decreased, such as savings, deposits, and money market mutual funds. If you currently do not have an emergency fund, start setting aside 10% of income, until the ideal is achieved.
Second is debt. Summarize the minimum payment on all your debts. These include credit cards, car loans, housing loans, and other loans. Total payments of all your debt repayments should not exceed 35% of monthly income.
Do not forget to diversify
Third is pension funds. Prepare your future by starting to invest for retirement. Try to set aside 10% of income to the appropriate investment products for pension funds.
Fourth is insurance. Protect the asset value and economic value of your soul is very important. Evaluate your protection needs, and make sure you have insurance that is really needed by your family.
Fifth is wealth diversification. Having assets that spread across three different allocations is a wise thing. Combinations that must exist: a stable liquid assets (savings deposits), physical investment assets (precious metals, property), and investment asset in the stock market (mutual funds, government bonds, stock).
For each category, you can select one. Consider your financial goals, your current situation, and how much time you have to achieve your goals and wishes.
Financially healthy is the first step towards the financial freedom stage. Like the human body, the financial health must be achieved and maintained.
Live a beautiful life!
Someone who is financially healthy, generally know the condition of assets and debts, able to always pay the mortgage debt on time, and know how to use the assets and cash flows to achieve life's wishes. How about you?
The easiest way to find out the financial health is to do a financial check-up. This process can be done alone or in consultation with a financial planner. You will be invited to recalculate the amount of assets and the amount of debt currently held. In addition, you will also be required to inform the amount of your income each month and where the money goes.
There are five areas you should look to determine how healthy your finances, and how close you are to achieve your life wishes.
First is the emergency fund. Every person shall have an emergency fund at least 3 times the monthly expenses.
This emergency fund should be in liquid form of assets and the value is not decreased, such as savings, deposits, and money market mutual funds. If you currently do not have an emergency fund, start setting aside 10% of income, until the ideal is achieved.
Second is debt. Summarize the minimum payment on all your debts. These include credit cards, car loans, housing loans, and other loans. Total payments of all your debt repayments should not exceed 35% of monthly income.
Do not forget to diversify
Third is pension funds. Prepare your future by starting to invest for retirement. Try to set aside 10% of income to the appropriate investment products for pension funds.
Fourth is insurance. Protect the asset value and economic value of your soul is very important. Evaluate your protection needs, and make sure you have insurance that is really needed by your family.
Fifth is wealth diversification. Having assets that spread across three different allocations is a wise thing. Combinations that must exist: a stable liquid assets (savings deposits), physical investment assets (precious metals, property), and investment asset in the stock market (mutual funds, government bonds, stock).
For each category, you can select one. Consider your financial goals, your current situation, and how much time you have to achieve your goals and wishes.
Financially healthy is the first step towards the financial freedom stage. Like the human body, the financial health must be achieved and maintained.
Live a beautiful life!
(image taken from:www.ffrcollects.com)
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