How to use your accumulated wealth systematically for retirement or sabbatical

The discussion is always on planning a new thing, making a new investment, buying a new car, seldom we think or plan on how to wrap-up. What to do with the proceeds of fixed deposit maturity amount or an insurance payout. Planning helps, not only in beginning also in wrapping up and moving on. What after we reach the goal, after our equity investments hit the target, it is equally important to have systematic process to sell-off your investments utilise the proceeds.


how-to-use-your-accumulated-wealth

Everything has a shelf life or an expiry date, however rude may it sound, human too are born with an expiry date. We don't see things ending, we dieing, losing, we like clinging to our stuffs and dont make most of our investments. If we take a case of the investment world, we don't often refuse to see the asset class dooming. We love to ride the bull, and anxiety bites when bear strike! Every asset class has its performance cycle and as an investor aligning our goals with the performance of the asset class is important. Even financial investments too have expiry dates. Like life insurance comes for a term and fixed deposits come with maturity date.

#how-to-use-your-accumulated-wealth

For the instruments which doesn't have an expiry date need to have a periodical review on their returns. I am not here getting into the physical assets like gold , yet will have a pointer on real estate investments. I am focusing on financial assets like equity and open ended mutual funds especially. 

What do you do with asset class which are perpetual in nature like equity, open ended mutual funds and even ULIPs with long term 20 year maturity period. Return on the equity is amazing on the long term. But how long is long for you is purely upto your goal and comfort level. Also, equity market with its long term wealth creation is known for its volatility. Any investment should be attached with a goal. It could be retirement planning, child's education or summer holiday in europe. If we use-up the sum for a particular goal, we are sorted. But if the sum is saved-up for a retirement or a sabbatical, here are few ways you could look at - 

We could have few systematic process to make the most of financial plan at every stage of life.

Few ways to use the accumulated wealth-

Systematic Withdrawal Plan - Exactly the same concept of SIP, in this process you could chose a specific sum or units for withdrawal from your folio, which will be credited into your designated bank account, with this you will have a regular income every month. chosing a hybrid or short term debt fund is an ideal option for this.

Monthly income plan - A lump-sum amount, proceed from PPF/ EPF or full and final settlement can be put under such scheme. MIP schemes are debt heavy funds, with marginal equity exposure upto 30%, making it more consistent on returns. However, the dividend is not guaranteed, subject to the performance of the fund.  

Deferred payment on Insurance proceeds - Incase of unfortunate demise of an earning member of the house, assuming he/ she would be insured, the nominee is entitled to get a lump-sum amount of the sum-insured. Often the nominees are unaware bout how to prudently use the money, it is a good option to chose deffered payment options to secure regular income for a long period of time.  

Reverse mortgage of house - This is still unconventional concept in India, but it is taking shape. For anybody above 58 years, this is an option for regular monthly income. In simple words, this is exactly opposite to conventional home loan. Ideally for senior citizen, is the borrower pledges the property to a bank and get a regular income till the end of his life. The bank in this case disburse loan periodically to the house owner, end of the term, bank takes the house or sell it, additional amount if any from the proceed of the sell is passed onto the legal heir.

It takes sweat, blood and discipline to create wealth, but once it is created, we must be prudent in-terms of utilising the proceeds with prudence. Happy investing, happy spending. For any query on money management I am accessible at mymoneystreets@gmail.com #how-to-use-your-accumulated-wealth

Do you have the Moolah to buy your desires? Budgeting will help

This article is written by Guest Author Ms. Nayan Thapar, a personal finance enthusiast and pursuing post graduation in communications. Views are welcome at mymoneystreets@gmail.com

You wish to buy a house? A car? Or let’s say you are this “I love to travel so let’s pack our bags and go on an adventure trip” kind of a person. But, the fact that there isn’t enough money in your bank account to fulfil your whims and fancies, you cease to live life the way you want to live. You somehow always end up restricting yourself and ultimately, just get used to the life that lacks impulse.

From the blog - Create wealth with conviction and planning

In order to provide a cushion to your dreams, here are some tips that could ease your financial pain in no time. So to be precise, let’s talk about the ‘B’ word: Budget

·         The little things; #thatmatters

We joke about these little things but at the end of the day, these Lilliputian efforts that you put in, really matter. Giving an example would make a difference. As a student, you are always late to catch the college bus that you get as a service and instead you end up taking an Uber or an Ola because you want to be in class before 10 am. Now, that costs you around 30 bucks which is insignificant but when we calculate it in our monthly expenses, it sums up to about 900 which “could” have been used as your bus ticket to the next destination on your travel bucket list. Does it make sense? I think, it does.

From the blog - Top reasons for claim rejections

·        Confessions of a shopaholic

Everybody understands when we talk about impulse buying because everybody has gone through that phase at some point in their life and everybody has gone on a major guilt trip now and then. The question is how do we curb this feeling? Well, now that we are staying in a world full of digital heads, there are so many apps which can help us keep a check on the kind of purchases that we make and in which areas we end up splurging on. Apps like Walnut, MoneyManager and Monefy can actually curb your urge to splurge!

·        Get set Goal

Set a monthly as well as an annual aim or a short term and a long term goal, according to your suitability. It just makes things a lot simpler. You already have a pathway on how you have to go about throughout the month and it won’t come out as a shocker unlike the times when you suddenly realize that you are underpaid or you fall under the ‘urban poor’ bracket.

·        Strike a happy medium

Balancing your way through is essential. Every month, when you plan your checklist, categorize on where you want to extravagantly indulge and where you can cut down on your expenses to balance out your expenditure.

If you make these miniscule changes to your financial calendar, then there is a definite chance that you might bag some bonus trips and getaways or might end up purchasing more than what your pocket allows (but that is helpful sometimes and not all the time).