Financial Planning for Beginners – How to become rich

HOW TO BECOME RICH

Who doesn’t like to get rich, not only a businessman but also a regular salaried person is capable of being rich by following simple financial planning? In this article, you will learn Financial Planning for Beginners and How to become rich.

Most of the rich people around us are salaried class, it took them 20-25 years to get financially strong because they used to save money, researching, and regularly investing.

At the start of our career, most of the financial advisors suggest saving or invest 50% of our salary. As basic financial planning is mandatory for everyone, youngsters don’t show much interest in savings and investment plans.

If you start an investment plan or saving from 21-22 years, then your capital investment will get multiplied every year, and you will become financially strong by the time retirement.

The investment interest rate will be greater than the salary if you invest for 25-30 years in investment plans. The framework must be different for youngsters and experienced person, and the same framework won’t be applicable for both.

Let us know about the percentage of capital investment we can use for our daily needs and investments plans 

If you have started your career and your salary is about Rs 20,000 per month, then you have to follow 50-30-20 rule of your capital investment where 50% of your monthly salary which is Rs 10,000 per month should be used for your daily basic needs like rent/EMI, food, transportation, etc.

30% of your monthly salary which is Rs 6000 per month should be used for your wants like a car, vacation, expensive gadgets, etc. 20% of your monthly salary should be used for savings and investment plans.

Investing 20% of salary, which is Rs 4000 per month, will help you to your financial planning for your retirement, kid’s education, marriage, etc. You can start investing in the stock market, real estate, or best mutual funds. 

If you are an experienced person and your salary is about Rs 40,000 per month, then you have to follow 40-20-40 rule of the capital investment where 40% of your monthly salary which is Rs 16,000 per month should be used for your daily basic needs like rent/EMI, food, transportation, etc.

20% of your monthly salary which is Rs 8000 per month should be used for your wants like a car, vacation, expensive gadgets, etc. 40% of your monthly salary should be used for savings and investment plans.

Investing 40% of salary, which is Rs 16,000 per month, will help you to plan for your retirement, kid’s education, marriage, By following Financial Planning for Beginners post, you will have good savings in the future. 

FAQs

  1. Why should I hire a financial advisor?

    Working with a financial advisor provides you to the investment plan for your capital, manage risks, and helps you to reach your financial goals.

  2. How do financial planners manage legal and tax-related issues in personal finances? Are they qualified lawyers too?

    Yes, financial planners face some issues in personal finance. When they find some problem in the profile which needs the preparation of some document required, then they will take advice from other financial specialists like legal advisory or Charted Accountant.

  3. Who is a financial planner?

    Presently, many professionals may think of themselves as financial planner’s but Certified Financial Planners should complete their course and require experience, and those financial planners will follow ethical standards and can make the correct decision.

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