Question

A detail list of strategies for achieving life and financial goals should be designed by using the principles outlined in this course.

Identify the alternative courses of action which could achieve the goals above. This may include calculation for the courses of action with taking into consideration of the period used to achieve the goals. All information provided in this section should be based on the current rate and real financial products in the market.

The financial strategies MUST include:

• Saving plans
• Insurance planning
• Investment planning

1000 words

Answer 1

When an individual starts earning and that to the earning as recurring in nature, he should start to think about savings to be done for any future needs and goals. They can be :

1. Buying a Home/Flat.

2. Marriage expenses

3. Foreign trips

4. To buy any car or other valuable things, etc

I believe that we should always think about savings rather than spending. For instance, if Mr. A is earning $ 10,000 a month and plans that he will save $3,000 at the end of the month then he might not able to keep up with his plan as he is thinking to save at the end of each month. Alternatively, if Mr. A has a plan to save at the beginning of the month he will be left with $ 7,000 for his monthly expense and will be successful in making his investments.

The savings may be just not be kept ideal but must be invested in various means so that the individual gets a return from the same. Different ways to invest include the following:

1. Locking the money in a deposit account with the bank (Fixed or Recurring Deposits): If the investor is not whishing to have any risk and wants a regular return, he can go with this option. FD /RD ensures a fixed return on the principal invested at the rate decided at the time of making the investment.

2. Investing in Stocks and Mutual fund. This method will require deep knowledge in the field of Stock markets. There are hell lot of stocks and MF with gives different return at different risk levels. If an investor is young he may go for risk-averse stocks which give high returns and vice versa. Here the risk and return are inversely proportionate to each other.

3. Life and Medical insurance: which will ensure a fixed payment upon death or any medical expenditure on payment of a regular timely Premium.

4. Investing in precious metals and stones: such as gold, silver, diamond which tends to increase its value as when time passes by.

An Individual may opt for any one or a combination of the above methods.