11 Easy Hacks to make you Richer in the new Financial Year...!!!

We are just 9 days into the new Financial year. This is about time when the 'Financially Educated' plan their income allocation and tax structures so that they can reap the good results of their decision-making in the forthcoming year.

Now, "Financial Literacy" was a subject I often avoided in order to cloak my ignorance. But following Dr. David Schwartz's advice of "digging deep into the lesser known subject", I have now begun to enjoy this learning process. I am a fortunate soul to have people around me who are in good, stable stead to guide me through the financial-ignorance backwaters.

Given below are some tips, straight from the Teacher who I think is the biggest Financial Wizard I know in personal capacity. These tips are very basic ones, and are more like a gentle general reminder so that one can stay financially strong in the coming times. 

Here we go:

1. We all should save minimum 40% of our income.

2. We should keep 6 months expenses as an emergency fund. 

3. Minimum 20 times of our yearly income should be our retirement fund.

4. Cost of our house should not be more than 6 to 8 times of our family annual income.

5. EMI should not be more than 35% of our gross monthly income. ZERO IS BEST ANSWER.

6. We should have minimum Mediclaim of 5 lakh. 

7. Life cover should be Minimum 10 times of our yearly income. Ideal and cost effective is to take term plan.

8. Ideally 65 to 70% of our income should go for creating appreciating assets and rest for consumption. This will help ease pressure on us as we age.

9. Rate of returns should ideally beat inflation.

10. Rule of 72 & 115 :
How many years double or triple our money ?
* 72/Returns= double in yrs
* 115/ returns = triple in yrs.

11. 100 minus our age should be our equity allocation. It is the best asset class in the world.

Of course, there is no magic formula that can make you rich overnight. It s a matter of diligence, patience and conscientious effort. And many more of such things. :)

But then, as is rightly said, "Well Begun is Half-Done"!!

"Out of the Box Thinking" - A beautiful Story...!!!

Many hundreds of years ago in a small Italian town, a merchant had the misfortune of owing a large sum of money to the moneylender. The moneylender, who was old and ugly, fancied the merchant’s beautiful daughter so he proposed a bargain. He said he would forgo the merchant’s debt if he could marry the daughter. Both the merchant and his daughter were horrified by the proposal.

The moneylender told them that he would put a black pebble and a white pebble into an empty bag. The girl would then have to pick one pebble from the bag.If she picked the black pebble, she would become the moneylender’s wife and her father’s debt would be forgiven. If she picked the white pebble she need not marry him and her father’s debt would still be forgiven. But if she refused to pick a pebble, her father would be thrown into jail.

They were standing on a pebble strewn path in the merchant’s garden. As they talked, the moneylender bent over to pick up two pebbles. As he picked them up, the sharp-eyed girl noticed that he had picked up two black pebbles and put them into the bag. He then asked the girl to pick her pebble from the bag.

What would you have done if you were the girl? If you had to advise her, what would you have told her? Careful analysis would produce three possibilities:
1. The girl should refuse to take a pebble.
2. The girl should show that there were two black pebbles in the bag and expose the moneylender as a cheat.
3. The girl should pick a black pebble and sacrifice herself in order to save her father from his debt and imprisonment.

This is a story with a hope that it will make us appreciate the difference between lateral and logical thinking.

The girl put her hand into the moneybag and drew out a pebble. Without looking at it, she fumbled and let it fall onto the pebble-strewn path where it immediately became lost among all the other pebbles.

“Oh, how clumsy of me,” she said. “But never mind, if you look into the bag for the one that is left, you will be able to tell which pebble I picked.” Since the remaining pebble is black, it must be assumed that she had picked the white one. And since the moneylender dared not admit his dishonesty, the girl changed what seemed an impossible situation into an advantageous one.

MORAL OF THE STORY: Most complex problems do have a solution, sometimes we have to think about them in a different way. The key is, "T H I N K".

If you liked this story… please give me a thumbs up, share it on Google+ or Pinterest, share with friends, family and children. You might spark a thought, inspire someone and possibly change a life forever!

So, Think and Think "Out of the Box"...!!! :)