Diwali 2016 is round the corner and everyone is eagerly awaiting to celebrate various festive days. We buy new things such as clothings, furnishing items and many more and celebrate various festive days with crackers, sweets, and gifts. Lakshmi Puja is considered to be the most important day during Diwali. It helps people to realise the importance of wealth creation and money making. Over years we have been following rituals of lightning fancy lamps, cleaning house etc. to seek blessings of goddess Lakshmi. However not everyone receives the blessings of Lakshmi, which means money. It can due to various reasons no or incorrect investments etc.

We often create financial goals at the beginning of new year but this time let’s start financial planning in Diwali and give a fresh start. And here are some basic wealth creation/management tips for everyone.

1. List down your goals: This is the first and most important step in wealth creation. And all your financial investments should have a goal.
2. Emergency fund creation: Always have some amount of money ready in your bank account to be used only during emergency needs.
3. Buy health insurance: We will first meeting your health goal. One of the most recommended insurance product across the world is health insurance. Not having a proper medical insurance is the starting point for future financial disaster. Rising medical treatment costs can badly ruin your hard earned savings when you don’t have health cover. Moreover India does not offer social security unlike western countries, so buying a health insurance is very important. And when bought at an early age, you will save good amount of money in premiums. So compare and choose best medical cover for yourself and family members.
4. Buy life insurance: Another insurance which is always recommended especially to individuals with financially dependent family member is life insurance. There are many types of life policies. At the basic level, an individual must have either a term plan or whole life policy. In case of the death of the insured person during the policy term, the beneficiary will receive the sum assured.
5. Write down spendings: If not daily, atleast make a habit of writing down your expenses every week. Trust me, this works wonders. You will actually come to know unwanted expenses you have made and then take action on cutting those spending next time. For e.g. when you buy something in store and later on you realize the same stuff could’ve been bought at much lower price online, then next time you can compare prices online and offline and save money.
6. Invest in zero risk but good return investment products: Not everyone likes taking risk with their hard earned money. And it is perfectly fine. After all it’s your money. For such safe investors, investing in no risk and high return investment products is recommended. And this includes, public provident fund, sukanya samriddhi account, national savings certificate, and few others as mentioned in this article.

If you follow atleast above mentioned six pointers, then years down the line you will see the real fruit.

• Invest in stock market: Many people have negative belief about stock market. They relate stock investment to gambling. If you also think this way, then your mind definitely needs a cleaning. Although for a risk avert individual there are many zero risk and high return investment options. But if you have been staying away from stock market just because you think that it is a gambling then you are keeping yourself away from enormous wealth creation opportunities it offers. Risk and returns are two important factors when evaluating any stock. And by analyzing the past performance, future price of stock can be calculated. If you are not an expert in this field take advice of your broker. It’s their job to guide you, higher the profits you earn, higher are their incentives.
• Portfolio Cleaning: Everyone must have invested somewhere either equity, mutual fund, fixed deposits etc. And not every investment product will give you the best return. Sometimes you might have to deal with negative returns. Let’s take an example of stocks. People often buy stocks at prices and few months down the line may not see any reasonable returns. In such cases, individuals need to revisit their portfolio and move out of loss making stocks. Although you will make losses but who knows stock price may further slide. Instead move out of such stocks and invest in other stocks or other products. Best is to invest in SIP as mentioned below.
• SIP Investments: India is a growing market and regular investments over longer duration will definitely make your bank balance green. Investing in systematic investment plan (SIP) regularly as per your convenience, especially in equity mutual funds is surely the most recommended wealth creation strategy. And earlier you start investing higher would be the return compared to individuals investing late. Moreover the minimum amount required to enter into SIP is Rs. 500 which is a small amount.
• Hire Financial Advisor: Not everyone is an expert in money or financial markets or has time to actively monitor their money and investing at its best. For such individuals, hiring a financial advisor is highly recommended. Their job is to make clients meet their financial objectives such as higher education, children’s marriage, foreign travel etc. Read more on what questions to ask financial consultants.

So best of luck and may goddess Lakshmi shower everyone with good luck and prosperity for the years to come.