A financial portfolio is the foundation of the life you dream for yourself and your loved ones. It enables us to realize the kind of funding that would be required in order to fulfill all your dreams and aspirations but the problem is, even after so many advantages of a financial portfolio or plan, very few of us possess it.
We have prepared a list of steps that will help you build a stable and sustainable financial portfolio. If you stick to it, it will ensure for you 3-4 months saved emergency funds, retirement funds, diversified investment portfolio and to add to it, you will be debt-free.

Step 1: RECORD EVERYTHING
By record I mean, note down everything you possess. It may be your house, car, property, investments, savings accounts, etc. make sure you take into account your debts as well or some money you have borrowed from a friend or credit bills which are pending. Be honest to yourself for once and you would never need to lie to yourself again.
Estimate your net worth accurately with everything accounted in this balance sheet.

Step 2: INCREASE YOUR PROVIDENT FUND CONTRIBUTION
To start with, this is an excellent move towards building a corpus that is going to be huge by the time you receive it. Time value of money is the concept that backs this contribution. It becomes difficult for some people to work out a plan that will put a cut in their take-home income.
But the reality is, you need that money more when you would not be physically capable of working so much. Also, an increased PF contribution will lead to covered tax-exemption.

Step 3: START CLEARING-OFF THE HIGH-INTEREST INSTRUMENT FIRST
Of the two or three different credit cards you possess, start clearing the debt off the one which charges the highest rate of interest. They are the biggest devils eating up your hard-earned money. Take out the balance sheet you prepared in step 1 and on a separate sheet of paper arrange all your debts in descending order, the highest debt amount with the highest rate of interest.
Even if you can’t pay in full right away, try and clear the minimum balance requirement on that card. By the time you gather enough to clear it off completely, you can stay tension-free at least on this card’s part. Then cover up the next one and so on. Read how to pay-off debt on a low salary.
Note: This is not a one-time or short-term process. It is going to take a lot of time, the key is to hang on and keep clearing.

Step 4: FUND YOUR RETIREMENT
It is very important for you to start funding your retirement right away. There is no excuse for it. Retirement funding is highly important but most people realize its worth late. Start funding your retirement as and when you start earning when a load of responsibilities is almost zero and there are very little fixed expenses.
There are a lot of retirement schemes which offer tax benefits as well. Look for the most appropriate one for you, NPS is one scheme which is run by Government of India and offers good tax benefits with lucrative pension plans. Look out for the one that suits you best. Read more about retirement planning.

Step 5: BUILD UP YOUR EMERGENCY FUNDS RESERVE
Going forward, building up your emergency fund reserve is the next important step. On average, a 3-4 months salary should be saved for emergency times. This number can go up as the size of the family increases. This reserve comes handy during rainy days of life a lot of which are unavoidable.
The reserve can come handy while;
• Paying debt
• Insurance costs
• Medical conditions
• Children education
• Credit card minimum payment
Note: Emergency funds can also be invested but their primary purpose is not generating returns but liquidity. if you wish to invest your emergency funds, choose the options which can be liquefied within a maximum TAT of one day.

Step 6: INVEST YOUR MONEY TO GROW IT
If you want your money to grow, invest it. Depending on your long-term financial goals, choose the type of investments that best suits you. Build up a diversified portfolio that has all the components of the financial market covered like bonds, stocks, debt funds, equity funds, etc. Also, it is very important to review your portfolio time-to-time. Learn why you need to review your portfolio.
Take expert advice if you find it difficult to select the right funds and take financial decisions accordingly. Try our financial advisory service, Piggy Premier, to get sound financial advice from SEBI registered financial advisors.

Step 7: UPDATE YOURSELF
This is really important in order to keep up with the advancing world. Brush up all your work-related skills every now and then and while you are still working, develop a new hobby and master it to the level that it can earn you money if required.
If you are interested in investments, enroll in an online course which covers up basics of accounting, finances, and investments.

Step 8: BE PERSISTENT
Persistency is the key to financial well-being. There are a lot of people who start many schemes or enroll for a lot of courses but only a few of them end up completing it. Do not be in the league of losers or you will lose your money. Hang on to that commitment you made to yourself about the finances in all the above steps and see the results in a short time.
Unless you win a lottery, nobody became rich over-night. They worked through it, consistently. Be in the league of such people and see your wealth accumulating and growing.

Start Planning, Start Saving!

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