Money Lesson learnt from Convid19

 STEPS TO STAY AFLOAT AS COVID-19 STRIKES

Financial Planning to be secure at the time of any emergency

Extract from India Today Magazine 

Create a Emergency Fund

Keeping aside some  money for emergencies, such as unforeseen expenses or a sudden, even temporary, loss of income. Financial planners advise three to six months’ worth of expenses in cash or near-cash liquid assets. 

The idea is simple: this money should be available to you at very short notice, so liquidity is of the essence. 

Employees in highly vulnerable sectors such as aviation, hospitality, travel and tourism might like to set aside more. These are very uncertain times, so even 9-12 months’ expenses [can be parked in contingency options]

 Have health insurance

You do, however, need to set aside money for a health emergency in the family; Rs 5 lakh might serve. Not buying health insurance is not a risk you should take, because the annual premium on an insurance cover is a small fraction of what your hospital bill might be, if you have to be admitted. 

The right mutual fund for you

In times of great uncertainty, the stock market tends to go berserk. Stocks of good pedigree also get hammered, but seasoned long-term investors see that as an opportunity to pick up undervalued stocks. For those who lack the expertise, or the time or inclination to make individual stock picks, diversified equity funds or index funds are the way to go. They usually deliver returns that comfortably beat inflation and are easily the most transparently regulated investment avenue for inexpert, passive investors seeking long-term returns. Those who want to play it safe could look at large-cap index funds or large-cap funds

For further discussion

Feel free to contact

Pankaj Bhanwani

pankajbhanwani@gmail.com