Finance Guru Speaks: This is a special article on the occasion of Valentine's Day and it is written on the demand of some of my readers!
Valentine's Day is celebrated on 14th Feb every year and it is considered to be the best day to express your love and care for your loved ones. Have I told something which you are not aware of? 😉
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| Financial Freedom |
Well, the answer lies in your LOVE! I absolutely love my Financial Freedom and always encourage my audience to walk on the path of this freedom.
Financial Freedom is not a destination, rather it is a continuous journey where you keep a track of your Assets and Liabilities and maintain your required Standard of Living.
I am very sure you know the meaning of Assets and Liabilities.
Assets generate Income whereas Liabilities generate Expenses.
Let's understand with simple examples.
If you are getting Monthly Rental from your Property then it is considered to be one of your Assets.
However, the Amount (EMI) paid on your Personal Loan is considered to be your Liabilities.
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| Assets and Liabilities |
Follow some basic steps to stay on the path of Financial Freedom:-
1. Maintain an Emergency Fund equivalent to 6 to 8 months of your monthly Income or 12 to 14 months of your monthly Expenditure. Keep this Emergency fund in the mix of Bank Deposits and Debt Mutual Funds.
2. Keep yourself adequately insured. Buy Term Insurance for covering your Life, Health Insurance to cover Critical Illness & Hospitalization expenses and Accident Insurance.