DON'T RETIRE RICH

Sunday 19 March 2023

FOLLOWTHESE STEPS TO MAXIMISE THE POWER OF BUDGETING

Living a life eagerly waiting for that SALARY DAY every month end not only leaves you with a lot of stress but also drains your entire energy, focus on TODAY rather than focusing on planning and creating Wealth for your future life.

 

The BASE for a Strong Financial Life is to have a BUDGET.

You need to tell your money WHERE to go rather than wondering WHERE DID MY MONEY GO?

Budgeting helps you in this. If you don't know where the paisa go, soon you'll lose the rupees... then the house.

 

Remember you are the BOSS of your personal finance and since you are not answerable to anyone, the tendency to spend WHEREVER is high.

Be disciplined.

Budgeting is for everyone. Poor, Middle Class, Rich... everyone. No matter how big or how small your monthly spending is... budgeting helps you keep a track of your spending and helps you plus the unwanted unknown spending that was happening by you.  Budgeting is driving your car with EYES WIDE OPEN.

Good budgeting helps you avoid Debt, plan for annual big expenses like Festivals, School fees and even for Huge Once in Lifetime expenses like Buying a Car, Buying a House and even planning for your Dream Retirement

 

1st step:

Start by writing in detail about what your expenses are every single month. Write a plan for the month's expenses and STICK TO the IT

Use Notes, Excel Sheets, Mobile, or whatever helps you to maintain this. Writing this down will help you to review your past expenses and help realise and eliminate all those unwanted expenses

 

 

2nd Step:

Prioritise & Eliminate

Prioritise ruthlessly. Avoid unnecessary expenses.

Avoid expenses that are intended to SHOW OFF.

Avoid eating out and upgrading that smartphone unless necessary.  Ruthlessly ELIMINATE unwanted expenses like Memberships, subscriptions to TV channels that no one watches, magazines that no one reads, etc

The access to Credit Cards and other loans has spoilt the middle class and is preventing them from building their wealth and becoming rich.

Avoid the Zero EMI and Discount Sales unless you are ACTUALLY IN WANT of the product/item.

 



 

3rd Step:

SEGREGATE

Segregate your expenses into FIXED (Rent, Electricity Bill) and Variable (Hotel Food, Travel)

This helps you PLAN for the Variable

Fixed expenses are normally non-negotiable but FIXED expenses can be scaled down.
For example:

Do you really need a 55-inch TV when a 42-inch is enough?

Do you really need an SUV car when your family is small?

Minimise them wherever possible as FIXED expenses have a greater impact on our Savings.

For both Fixed and Variable expenses, a little bit of advance planning helps you save a lot.

In fact, for example, if you plan your family trip properly, you can get discounts on Hotel Rates, Flight Tickets and thus save a good amount of money which can then be used to Invest for your Retirement, etc

Even while buying a Mobile phone, if you could buy it during festivals, there will always be discounts and you could end up saving a few thousand rupees.

 

 

4th STEP:

Keep a portion for unplanned emergencies.

Life doesn’t go as per our wishes and there are always googly thrown at us.

An emergency fund helps us be prepared for home repairs and replacing non-working equipment.

Besides this emergency fund, Health Insurance is compulsory to help us tide over medical emergency expenses.

 

5th STEP:

INVEST THE DIFFERENCE

This budgeting is sure to help you SAVE MORE.

Now that you have saved more, make sure that the money is INVESTED and invested as per the Asset Allocation, Risk Horizon, and Gold Time Frame.

Take the help of a Good Financial Expert and invest accordingly.

THE BEST WAY TO SAVE AND INVEST IS TO AUTOMATE.

As soon as you get the monthly income, first INVEST the planned amount and then keep the rest of the amount for your monthly expenses.

Assume as if the INVESTMENT is a LOAN TAKEN FOR YOUR FUTURE GOLDEN YEARS and you are paying the EMI for it!!

 

 

6th STEP:

REVIEW AND MAKE NECESSARY ADJUSTMENTs:

Once every 3 months, sit down again with your life partner and review your budget list to understand if everything is on track.

This review also helps in making adjustments wherever necessary especially if there is an increase in monthly income (salary) and even expenses (fees, etc)

 

 

BUDGET is a great tool in making your life a Financially successful one.

 

FINAL WORD:

BUDGET will help get you. 

•  A Clearly Visible Sustainable Monthly spending plans

•  Practical Ways for reducing your monthly bills

•  Handling debts if any and gradually clearing them completely.
•  Help in identifying and distinguishing your Goals be they Short Term, Medium Term, Long Term

•  A Clear-Cut vision of Future Family Needs
• And of course the various sources of monthly revenue

 

Planning your finances without budgeting is like eating food without salt.

Adding little salt is not a big task, and think about the difference it brings to your food.

 

Whenever in the future, you do get a raise in monthly income, make sure that 50% of the Raise is compulsorily diverted towards INVESTMENT.

This will boost your Retirement Kitty and help you Retire Rich and Retire Early

 

Remember that there is a huge gap between WANTING TO SAVE & ACTUAL SAVING and this gap can be easily filled by BUDGETING.

 

The BEST budget according to Financial Planners is

50% Needs

30% Wants

20% Savings

Follow the 50-30-20 rule and win the Wealth World

50 percent of the earnings after tax should be used towards necessities.

30 percent of the money should be spent on luxuries or wants / desires.

20 percent of the money should be saved and invested towards your financial goals.

 

Thank you very much for reading the article
Please make sure you follow this and elevate your Financial Life

All the best

Srikanth Matrubai

Author – Don’t Retire Rich

 




All the best,

Regards,
Srikanth Matrubai
MUTUAL FUND DISTRIBUTOR
REBALANCE VOLATILITY CERTIFIED COACH
Srikanth Matrubai, Author of the Amazon Best Seller DON'T RETIRE RICH


You are strongly encouraged to consult your financial planner before making any decision regarding this investment. The views expressed here are the author's personal views and should not be interpreted as a recommendation to invest/avoid.

 
Srikanth Matrubai Author of the Amazon Best Seller DON'T RETIRE RICH

Do read the book and give your valuable feedback and request you to post positive comments on Amazon. https://amzn.to/3cHUM6M/ 

You can purchase the book on Amazon and Flipkart 

For the best of ideas on where to invest to create Mountains of Wealth 
join my TELEGRAM channel
WEALTH ARCHITECT
    https://t.me/joinchat/AAAAAELl4KUnaJzi-JJlDg/

Saturday 11 March 2023

TAX HARVESTING - SIMPLE HACK TO SAVE TAX ON MUTUAL FUNDS AND STOCKS

 



Taxes and Death are the only things that are guaranteed in life.
Both cannot be avoided, and you must face them.

Thankfully, for taxes, there are some ways where you can legally reduce your outgo and one of them is the least known but very useful called TAX HARVESTING.
For Capital Gains, there are 2 types of taxes.

Short Term Capital Gains

Long-Term Capital Gains

Short Term Capital Gains are taxed on any profit/gains you made in an asset/instrument within 1 year of purchase (3 years with respect to Debt investment)

Long term Capital Gains are taxed on profit/gains made in an asset/instrument which you are selling AFTER 1 year of purchase


 

Long Term Capital Gains are taxed at 10% but ONLY when the profit/gains exceed RS.1 lakh

But we are all here for huge profits and not just 1 lakh, isn’t it?
However, you can avoid the Long Term Capital Gains to some extent by using TAX HARVESTING.

HOW DOES TAX HARVESTING WORK?
You sell your Long-Term Capital Gains asset for a profit/gain of Rs. 1 lakh and REINVEST IMMEDIATELY.

Because your Long-term Capital Gains did NOT cross the Rs.1 lakh limit, you DO NOT have to pay any taxes

This, of course, can be repeated year after year.


For example,

 

suppose you invest Rs.1 lakh in Fund A and it becomes Rs.2 lakhs by year-end….
Sell the same and REINVEST immediately the next day. now your BUYING price (as per Income Tax) becomes Rs.2 lakhs …

Though in reality, your actual cost is still Rs.1 lakh.

Continuing the above example, say in Year 2, your present Rs.2 lakhs become Rs.3 lakhs.. you again sell the same and REINVEST immediately the next day

Your new Buying cost is Rs.3 lakhs!!!

This way, you can ensure you are saving Long Term Capital Gains year after year (to whatever small extent)



Your Original Buying cost will remain Rs.1 lakh but as per Income Tax, it now becomes Rs.3 lakhs and when you sell for Rs.4 lakh....even though you are sitting on Rs.3 lakhs profits, instead of paying Rs.30,000 tax, you are PAYING ZERO as you have intelligently used the TAX HARVESTING!


Tax Harvesting is a strategy that helps you minimize tax outgo and potentially help improve your investment returns.

 

PROS AND CONS

PROS:
1. Of course, you pay LOWER taxes and save the same.

2. Higher returns as you will now have the option of reinvesting the saved taxes

3. Tax harvesting is actually a good tool to RE-BALANCE your portfolio too

 

 

CONS:

1. You could end up making your REINVESTMENT price HIGHER due to fluctuations

2. Charges like Brokerage, etc if any

3. Tracking the actual original cost after a few years

 

ADDITIONAL TIP:
The best option is to invest on the same day so that you don’t miss out on the NAV and for that, you better have some SPACE cash, especially since payouts in equity mutual funds and equities take 2-3 days

One friend of ours… sold his shares to do tax harvesting and planned to buy the same after 3 days but the stock SHOT UP BY 35% IN THAT 3 DAYS !!

 

 

NOTE:

Equity Investment is for the LONG TERM and WEALTH CREATION is the goal.  Never lose focus of this whether you do Tax Harvesting or not.

TAX HARVESTING IS TAX PLANNING and not Tax Avoidance or Tax Evasion. So, you can go about it BINDASS!!

Getting “ALPHA” besides the market returns is a challenge and TAX HARVESTING is one of the tools to get that extra ALPHA. 

Its highly recommended to review your investments once a year and the end of the year would be the perfect time as you can also consider whether Tax Harvesting could fit into your strategy for you. 

Strongly suggest and request you to please contact your Chartered Accountant for further details and a way to go about this

 

All the best,

Srikanth Matrubai

 

All the best,
Regards,
Srikanth Matrubai
MUTUAL FUND DISTRIBUTOR
REBALANCE VOLATILITY CERTIFIED COACH
Srikanth Matrubai, Author of the Amazon Best Seller DON'T RETIRE RICH


You are strongly encouraged to consult your financial planner before making any decision regarding this investment. The views expressed here are the author's personal views and should not be interpreted as a recommendation to invest/avoid.

 
Srikanth Matrubai Author of the Amazon Best Seller DON'T RETIRE RICH

Do read the book and give your valuable feedback and request you to post positive comments on Amazon. https://amzn.to/3cHUM6M/ 

You can purchase the book on Amazon and Flipkart 

For the best of ideas on where to invest to create Mountains of Wealth 
join my TELEGRAM channel
WEALTH ARCHITECT
    https://t.me/joinchat/AAAAAELl4KUnaJzi-JJlDg/

Monday 6 March 2023

MARRIED WOMEN'S PROPERTY ACT – FOOLPROOF PROTECTION OF YOUR LOVED ONES

 

 

Greetings,

We buy Life Insurance policies to secure the well-being of our family, especially our wife, and kids

But just taking insurance isn’t enough. You need to make sure that the intended beneficiaries (your wife or kids) get the benefits and not others

See…it may so happen that at the time of your death, there could be a scenario of you owing money to creditors or there could be a scenario that your relatives or other legal heirs may stake a claim on your insurance money, but taking a policy under the MWP (Married Women’s Property Act) will ensure that ONLY your wife will get the proceeds and not any other person.

 

Note: Nominee under the Nomination in Insurance only ACTS as receiver of the Insurance Proceeds and is NOT the final beneficiary.

 

Hence to make 100% sure that the policy benefits/proceeds go to people intended for the same has been registered under BENEFICIAL NOMINEE (spouse, parents, children)

 

Once Beneficial Nomination (including under the MWP) then NO ONE else can challenge or stake a claim.

But if there is any amount owned by you and recoverable by any creditors, then even the beneficial nominee's rights to become secondary

And hence the best option is to register the policy under Section 6 of the MARRIED WOMEN’S PROPERTY ACT (MWP) which gives SPECIAL PROTECTION to wife/children and protect them from even creditors

 

Note under the MWP only wife and children can be named as beneficiaries.

Once under MWP, no other family member or any heir or creditor can claim the policy benefits.
In fact, even if the husband and wife get DIVORCED after the policy is taken, the beneficiaries (wife/children) will continue to remain the same!!

Also do note that the lady can take loans against their MWP act Life Insurance Policy and that too without the consent of her husband.

BTW
MWP is not restricted to married men. Even widowers or divorcees can also take benefit of MWP to make their children beneficial nominees under the MWP act.


While applying for insurance, simply tick and fill in MWP details but note no addition/changes is allowed later.

Once a policy has been issued, it cannot be assigned under the MWP Act later. You must opt for the MWP Act at the time of purchase.

 

However, if you have already taken a policy and you are truly intent on protecting







your wife for future benefits, you can do an ABSOLUTE ASSIGNMENT. An Absolute Assignment shifts the ownership of the insurance policy from you to your wife and you are NOT the owner of the policy anymore!



For example, if, after the Absolute Assignment, but during the policy term (still life), anything happens to you, no claim benefit will be given to you as you are NOT the owner of the policy anymore and the policy has been transferred to your wife!


In fact, an ABSOLUTE ASSIGNMENT can be taken even 5,10 years AFTER taking a policy.

 

Do take the help of your Qualified Personal Financial Professional before taking any action. 

All the best, 

Regards, 

Srikanth Matrubai

Author: Dont Retire Rich

Qualified Personal Financial Professional





All the best,
Regards,
Srikanth Matrubai
MUTUAL FUND DISTRIBUTOR
REBALANCE VOLATILITY CERTIFIED COACH
Srikanth Matrubai, Author of the Amazon Best Seller DON'T RETIRE RICH


You are strongly encouraged to consult your financial planner before making any decision regarding this investment. The views expressed here are the author's personal views and should not be interpreted as a recommendation to invest/avoid.

 
Srikanth Matrubai Author of the Amazon Best Seller DON'T RETIRE RICH

Do read the book and give your valuable feedback and request you to post positive comments on Amazon. https://amzn.to/3cHUM6M/ 

You can purchase the book on Amazon and Flipkart 

For the best of ideas on where to invest to create Mountains of Wealth 
join my TELEGRAM channel
WEALTH ARCHITECT
    https://t.me/joinchat/AAAAAELl4KUnaJzi-JJlDg/

BOOKS BY AUTHOR

Recent Most Popular Posts

## Wealth Creation Lessons from the Cricket World Cup:

Lets look at some incredible insightful parallels between the Indian cricket team's journey and life lessons. Here are some correspondin...