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The concept of Financial Independence may mean differently to different people, some may believe they know what it takes to attain financial freedom whereas for some it may seem out of reach. Both the beliefs might prove
decisive in your journey to take control over your money and life. Financial independence is a milestone that can be achieved through a robust plan and a disciplined approach no matter where you start from. Let’s break down
this path for you

In general becoming financially independent means having enough income to pay for your living expenses for the rest of your life in a carefree fashion. There is nothing more satisfying than being able to accomplish things
that you or your family wants.

5 steps Gateway to your Secured Future: 
  1. Swipe Right to Insurance: Health is the new happy, is the most appropriate mantra. With increasing healthcare expenses and cost of
    living, neglecting insurance or being under-insured is a financial sin. Health insurance for each family member and life insurance for the bread earner will help you handle the risk of uncertainties and sail through the
    rough days. Bonus do not forget to claim tax benefits on insurance policies.

Four Must-Have Personal Insurance Policies:

      1. Term Insurance:

        This will provide your dependents with the financial cushion to fulfil their needs without a huge dip in their savings, in your absence. Generally, a term cover in the range of 20X to 25X of your annual
        income is the minimum recommendation.


      2. Medical Insurance:

        This will act as a comprehensive guard against your family’s hospitalization expense. Minimum cover of ₹. 5 – 10 Lacs per person would meet current requirements.

      3. Critical illness:

        A critical illness plan helps take care of exorbitant costs of treatment of a critical ailment like cancer, organ transplant, bypass surgery, etc. that can wipe out a significant chunk of your finances in
        no time.

      4. Super Top-up:

        In case the sum assured of your existing medical policy is low or to have additional coverage, a super top-up plan would be beneficial and budget-friendly than a new policy.
  1. Better without Loans: A loan or a credit card may hold good only to the extent you can repay it and is not a debt trap. With sky-high interest rates,
    these debts may cost more than they should. A major chunk of your earnings is consumed in its repayment further, it may restrict channelizing your funds towards attractive investments. Do not let these loans disturb your
    financial and emotional sanity by ensuring:
  • Acquire a loan only when you must and not for binge spending.
  • Build a sound repayment strategy beforehand.
  • Avoid borrowing multiple loans simultaneously.
  • The total EMI should never exceed 30% – 35% of your monthly income.
  1. Goals Conquered: Imagine having all your bills paid, a roof on your head, a luxurious car, yearly vacations, dream wedding. Systematic planning is a must
    to achieve your goals, if you wish to enroll in a course today, you need sufficient money for it now and not a year later, right? A detailed plan in advance considering the priorities, time limit to achieve them and
    mapping the investments for each particular goal can increase the chances of achieving them.
  2. Mindful Diversification: Diversifying your portfolio is like walking on a double-edged sword to balance the risk and returns of your portfolio, where
    either too much or too little might be alarming. Consider the following points to achieve optimized asset allocation that can earn same returns at lower risk:
  • A sound portfolio is easy to execute and convenient to manage.
  • The composition of asset class depends on various factors like age, purpose of investment, etc.
  • Invest in non-correlated asset classes considering varying risks and returns associated with them.
  • Ensure your investment in high-risk instruments is justified by appropriate higher returns.
  1. Retired not expired: Each one of us will walk the path of retirement, however it does not gets its due attention, as for most people it is atleast two to
    three decades away. We fail to realize life expectancy has increase beyond 85 yrs moreover the cost of living has huge impact of inflation. If you have age by your side you can discover the power of compounding. You can
    build a corpus of Rs. 2 crores at the age of 60 yrs by beginning monthly investments of Rs. 5,250/- at 25 yrs, whereas Rs. 14,950/- at 35 yrs. However even if you are starting late you can bridge the gap by saving more,
    reallocating your portfolio and if required increase your retirement age.

Financial Independence is building a roadmap on the three pillars of savings, insurance and investment, and evolve the plans over time to ensure you are on track. It’s impossible to reach a goal without
knowing the start, be aware of your current income, expenses, assets and liabilities. It’s always tough to save enough, however, use digitalization to your rescue, let the default investments lead you at the beginning of
each month. Implement these small changes to notice the difference is real.