Arti Arora, CFP | Head Financial Planner

Financial freedom is a very subjective term, the relevance and meaning of which varies from person to person. Reflecting on this, the kind of effort one puts into achieving this too varies.

For someone, financial freedom may be not having to work and still being able to maintain their standard of living, while for someone else it may have to do withthe assurance of meeting their responsibilities irrespective of any situation life may have to offer and for somebody else, it may be settling down in a serene place without any finance related worries and there could be hundreds of such definitions.

Financial freedom, actually speaking is the state of mind where one is aware about every aspect of their financial life and is taking informed decisions to make a life of their own choice and will.

It takes time to attain financial freedom and be confident about it, but it is like a journey one unravels and when you have a clearly laid out road map, you are sure to get where you are headed to. As a start point to attaining financial freedom, there are a few must to-dos that one has to exercise –

Financial freedom can be attained quite easily if you adhere to some of the rules that we list our below -

a. Define what it means to you, set it as a goal that you focus on and direct your efforts towards achieving it.

b. As you define (a), do know that it is only achievable when you save at least 25-30% of your salary and invest it prudently. Keeping it in the bank will never yield you the return needed for wealth creation and multiplication.

c. Every asset class has a return cycle, this is why following a defined asset allocation by creating and understanding a model portfolio and its allied return and risk is advised. Do not put all eggs in one basket and invest based on your risk tolerance. Else, you will end up in a vicious circle which is not rewarding.

d. Review is the key. Make sure you don’t invest and forget. Remember to review your investments on a quarterly basis and take corrective action, if and when required.

The above is like a talisman that if followed religiously can open your way to financial nirvana.

On this Independence Day, pledge for your financial independence and while we do understand the stress in current times, small steps and a clarity about the big picture will get you where you are headed to.

We at Plutus are there to support you at every step, which is our pledge.