Money making top tips: How, when and where to earn more than just your income; Millennials, pay heed

Are financial planning rules for millennials same as those for the non-millennials? Who are the millennials and what could be their needs and how can they ensure effective financial planning for themselves? Zee Business guest and financial expert Rachit Chawala, Founder and Chief Executive Officer at Finway Capital has some valuable tips to make money for this particular segment of the population.

Millennials are India’s young population ie the people who were born between 1980 and 2000. People who have become adults in the 21st century. Millennials are also called Generation Y.

 Many millennials may have started jobs recently and may not know the finer points of effective financial planning. The markets are also quite volatile at this point-in-time. During this time of uncertainty, millennials are not taking too many risks, according to our expert. He said that around 1/3 of the working professionals have been investing in risk-free instruments. There has been an increase in investments in Fixed Deposits and Recurring Deposits.

Money Making Top Tips

Rachit Chawala gives the golden rule of investment. He advises the millennials to apply 50-30-20 rule. Spend 50% of your income on essential things like utility bills, rents groceries etc. The next 30% should be spent on your recreation or other hobbies. 

The most important part is the 20 pct, which he says the millennials should save for a better future. When should anyone start? As early as possible. 

In fact, they should plan for short, medium and long term to ensure they have enough money to spend on themselves as well as have a pile saved for the time they retire. This approach will also ensure, that in between, they are also able to fulfill their need to buy a car, house, get married, go on vacations and much more. And they will be able to do this form the money they have themselves earned and not be dependent on parents at all or rack up debt from banks. How to make more money, is a critical question. Pay attention to this now:

5 Elements of Financial Planning

1. Emergency Fund

2. Debt-free life

3. Multiple income sources

4. Cash-flow planning

5. Retirement planning

Each of these is extremely important and will answer your question. The emergency fund will help you in the event of a job loss or cash crunch. Start investing in a 6-month view. You can invest in Emergency Mutual Funds.

Get Insured

The first and foremost thing is taking a term insurance plan. Plans vary according to the sum that one wants to get insured for. Most young professionals have financially inadequate term plans. Only one out of five people have term plans. According to a study, India has a low IPQ or India Protection Quotient at 35 pct. We are way below when it comes to getting insurance.

Only 44 pct millennials have awareness about term insurance and only 17 pct have term insurance plan. Around 22 pct of millennials living in the city are not interested in life insurance.

Have Lots Of Money After Retirement

Financial planning is important as your income is limited when you just start earning and also after retirement. Your savings and investments can bail you out after retirement. The interest in savings accounts is only around 4%, in general.

Keep some part of your income for your retirement. Do retirement planning while you are working.

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Millennials can invest in the National Pension Scheme (NPS) and Public Provident Fund (PPF) and Mutual Funds.

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