Fifteen Years to Financial Freedom

350 matches, 10000 runs, 1 ODI career– the creation of a legend. MS Dhoni’s ODI career stands testament to the power of what fifteen years can do. What could money do for you if you gave it fifteen years?

Levels of Financial Independence

Wouldn’t it be great to have your money work for you rather than work for money? The only way to flip that equation around is to achieve financial independence. There are many levels and layers of financial independence. Basic financial independence is not relying on others to meet ends meet. So, you wouldn’t have to resort to a personal loan or borrow from family to solve a financial emergency or fulfill an indulgence. At a higher level, being financially free is equivalent to making career choices according to aspirations. Financial independence also means a shorter career and longer retirement for some.

7 Steps to Financial Independence

If we know what financial independence looks like, what steps will get us there?

Disciplined spending

Having a handle on your expenses is crucial to gaining financial independence. Only if you master your spending habits and contain your expenses will you optimize your cash flows. When your cash flows are healthy saving is a breeze.

Understanding and Evaluating Risks

Before you embark on any journey – it’s important to know what the risks are. In your financial journey, the risks include losing your job, getting stuck in a poor investment, being overleveraged, being underprepared for financial setbacks, or losing a family member.

Avoiding financial mistakes

Aristotle once said, “Excellence is never an accident. It is always the result of high intention, sincere effort, and intelligent execution; it represents the wise choice of many alternatives – choice, not chance, determines your destiny.”

In personal finance, prevention is better than cure. Most people miss wealth creation opportunities because their savings are trapped in underperforming investments. Financial mistakes are costly and have long-lasting effects. Financial mistakes include being underinsured, servicing personal loans, buying a house too early, repeatedly depleting savings, underestimating financial needs, and working without a plan.

Investing regularly

Every marathon runner attributes their success to rigorous practice and discipline. Similarly, disciplined investors are the most successful wealth creators. Those who invest month on month, scale their savings with every pay raise and invest a portion of their hard-earned bonuses witness their investments bear early fruits.

Deciding financial goals

Priorities shift when there’s no plan in place. Anyone seeking financial independence must know where their priorities lie and anchor all decisions to them. Recognizing financial goals and prioritizing them is key. Financial goals range from creating a fund to start a dream venture, travel the world, or to retire early.

Addressing Retirement Concerns

In a world where retirement benefits are no longer the norm, life expectancy is rising, and careers are evolving – retirement hasn’t changed. With the gig economy and start-up culture – the concepts of retirement benefits like the EPF, Superannuation funds, pensions, etc. are losing focus. So, providing for one’s golden years becomes crucial.One must avoid the temptation to oversimplify retirement corpus calculations.How much you need to retire comfortably depends on how much time you have to retire, how much you want to spend in retirement, how much you can save, your life expectancy, inflation, your return expectations, etc.Getting the assumptions right, tweaking them from time to time, and adjusting for course corrections are the only way to address retirement concerns.

Creating Income Generating Assets

The pursuit of financial independence culminates in creating income-generating assets. Most people rely on real estate to generate regular income. Others rely on interest from fixed deposits. The guaranteed nature of these returns seems appealing, but the future may reward investors who think differently. Reliable passive income is the secret sauce to financial independence.

 Marathon SIP – The Financial Independence Plan

To reach any goal there is an overarching plan. The marathon SIP lies at the heart of financial independence. It combines a disciplined approach with risk management techniques to produce a versatile financial solution.

Risk Appetite

Each investor has a specific risk appetite. Usually, when an investor chooses investments outside their comfort zone, they end up prematurely exiting them. On the other hand, when investors invest according to their risk appetite – they stay invested long enough to reap the benefits of compounding. Our flagship Marathon SIP is customized to an investor’s risk profile.

Tax Strategies

For young working professionals – the new tax regime of more financial flexibility, lower slab rates, and easy compliance make the most sense. Instead of opting for investments with long lock-in periods, one could choose more efficient investments. The marathon SIP is the perfect alternative to a traditional tax-saving plan.

Mutual Funds

Cherry-picking the best investment options is challenging. The marathon SIP allows you to invest steadily into timeless ideas – spreading your mutual fund investments across asset classes. A Systematic Investment Plan (SIP) is the most convenient way for the salaried class to invest. The power of the marathon SIP lies in its structure – discipline and diversification.

Emergency Fund

Most savings plan are thrown off track by financial emergencies. The Marathon SIP anticipates financial setbacks and comes with an inbuilt emergency fund. This ensures that savers are prepared for financial emergencies and that savings plan can continue smoothly. An asset allocation approach to mutual fund investing also ensures that a layer of the portfolio is easily accessible during emergencies.

Financial independence is within your reach! All you need to do is start running towards your dreams with the marathon SIP.

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