If any expert says I saw it coming….either he is God or he is lying.
Only if had taken that Money Back Plan…..
They rarely get chance…..
Let me tell you…
A sip of Rs.10,000 in BIRLA GENNEXT FUND for 45 months…
Invested Amount = 4,50,000
i.e. Rs.4,50,000 invested was worth just 4,09.000…less than invested value even after nearly 4 years of SIP.
But….the average normal sip tenure is for 5 years and if the same was continued
but as I have told so many times..
CORRECTIONS ARE TEMPORARY
Actually, I would say RE-LEARN because its always the same lessons but maybe the reasons and the method would be different each time.
Those who followed our blogs would have definitely kept barest minimum of 3 months of Expenses in an Emergency Fund and for them…it would sure prove to be NECTOR in these times.
Yes….it seems so stupid at times to see your 6 months of expenses earning you 5.5% to 6% in a liquid fund when other instruments are giving you double digit returns., but as insisted by us so many times….each asset class has its place in the Sun and Emergency Fund is for Emergencies…..which the current LOCKDOWN has turned out to be.
The value of Emergency Fund is in front of your eyes now. Its for those period of time, when there is a shortfall in income.
I’m healthy….why do I need Health Insurance is the refrain.
The biggest mistake investors do in these kind of crashes is that to cover losses or pay the margin money, they tend to sell shares/funds which are in profit and retain those that are in losses.
If prudent Asset Allocation would have been adhered to, you wouldn’t have been in 100% equity.
The rising income tends to make people ignore Budgeting. But the COVID has ensured that you relearn and restart to respect the Budgeting of your Expenses.
Budgeting will decide where your income will go.
Cutting down on Wants and focusing on NEEDS is the 1st step to become WEALTHY.
Budgeting is not about becoming stingy. Its just understanding the priority of the expense ladder and ensure there is no Leakage in your Cash Outflow.
You cannot control whether your job is safe or not but you can control your impulse buying and avoid unwanted expenses.
Do not act in Panic or Excitement.
Take action only after consulting your well wishers and your Advisor.
7. AVOID DEBT :
Avoid debt like a plague.....rather like a Corona !!!!
Not just now even post Corona crises when things become normal...you are encouraged to strongly avoid DEBT.
1. Cancel all Money Leakages like unwanted subscription, multiple SIM cards, etc
Just look at your spending for the last 6 months and from March 15th till now….you will be pleasantly surprised to see that you would have spend (on an average) at least 40% LESS than your normal spending.
All your unwanted spending like Movies, Hotels, Malls, Travel is all curtailed.
Okay…..some percentage maybe inevitable but still at least 25% CAN be saved.
It just proves how much MORE you can save. Isnt it?
Go ahead and SAVE IT.
Increase your Emergency Fund Corpus
Increase your Health Insurance cover
and of course, route the savings to Equity Mutual Fund and make sure that you just DON’T RETIRE RICH BUT F.I.R.E & RETIRE WEALTHY.
If not, the Paper loss, will become PERMANENT loss.
LOOK AFTER YOURSELVES, not just physically but emotionally and psychologically.
The Rise of MORNING SUN is guaranteed even after the darkest of Nights.
Srikanth Matrubai Author of the Amazon Best Seller DON'T RETIRE RICH