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Introduction
Wealth creation might look like a lemon squeezy job, but it isn't. One needs to plan accordingly. Wealth creation is necessary for life because you never know how things might take a turn in your life and when a train full of financial emergencies and add-ons would arrive at your door.
This blog will help you understand,
This blog will help you understand,
- What is wealth creation?
- What are the wise and proper steps to create wealth?
- What are the factors one needs to consider in wealth creation?
- How is life insurance a beneficial tool for wealth creation?
- What are the best life insurance to view for wealth creation?
What is Wealth Creation?
Wealth creation relates to accumulating wealth via financial items in multiple ways.For instance, when you invest in financial items over a long period of time, you will receive more significant returns (here, the ROI is high). One works hard and earns more than a 5 digit salary so that they can enjoy and live through their long-term financial goals, such as a dream home, foreign vacations, providing good education to children, and many more.
Wealth creation is vital for every individual, and one should start planning and investing in the suitable means for wealth creation because:
It offers you ample funds in your reserve to help you achieve your long-term objectives.
It provides a consistent source of income even if you are no longer employed or earning. Even at the time of crisis, it acts as a financial backup plan. It might be an excellent strategy to assure financial liquidity and assist your loved ones in maintaining a balanced life without compromising any tangent.
Who would like to continue to earn when they have worked throughout their youth? None right? Because post 50 or 60 years, people want to sit back and enjoy their share of earnings without any constraints. With wise wealth creation, you will never face a financial crisis and will be self-sufficient for the rest of your life.
What are the important factors to consider in wealth creation?
Begin in your twenties: Yes, you heard me right. Even though it is the prime age to explore, earn, spend, and have fun, it is also the age to be wise and save. According to Shibu Das, founder of Fine Advice Private, starting early in wealth creation is a calculative task that can benefit individuals in the long run.If you start investing Rs.10,000/- monthly at a rate of 15% per year when you are 20, you would be able to retire at the age of 60 with a corpus of more than Rs 30 crore. However, If you wait until you are 40 and retire at the age of 60, your finance reserve will have Rs 1.52 crore!
Massive difference, right?
Even though age is just a number, starting at an early age impacts wealth creation.
Try to attain stability in one job: Firstly, have a stable job and then have some side remittance dishes in life. I stress upon stability because that's where a fixed monthly income happens, and then only you would be able to invest and reap the benefits.
One should always try to maintain a consistent source of income and pension benefits. One is free to hop from one job to another based on the hike you get but always make sure that before leaving one, you have another aligned so that you don't fall short in terms of finance or end up exhausting money from your emergency kitty.
Say YES to life insurance: Investing in life insurance is one mandate that one should follow once one enters their twenties. Life is uncertain because financial emergencies come unwelcomed and hold power to disrupt the status quo in your life. Life insurance is a wise option that one can use to have a steady and safe wealth creation.
Earn and Invest in multiple manners:
- Have a stable job.
- Try to multitask.
- Have other employment types because having several sources of income and various assets is one of the most potent wealth growth tactics you can employ.
Apart from earning income from multiple places, you can also invest in various areas to earn better. One can always consider options such as - life insurance, equities, mutual funds, and many more. Diversification lowers the chance of loss while potentially yielding enormous benefits.
Watch your expenses: One should earn aggressively and spend wisely; this is the thought that I follow. For instance, a home loan or an education loan makes sense, but taking a loan for consumables or items that lose value makes no sense. Impulse buying will result to be a curse if not dealt with rightly.
Always remember whether the product is a necessity or mere desire. The power of swipes or scans can make or break your financial base. Leading a debt-free life is something that everyone can't live. Challenge yourself to lead a sufficient life rather than pricey.
How is life insurance a beneficial tool for wealth creation?
Whenever you think of life insurance, consider it the unsung hero of one's life because it is a single package inclusive of many offers. Some of the benefits of owning life insurance are as follows:Death Benefit: Here, if the policyholder meets with an unfortunate death, the lump sum of the premiums paid by the policyholder will be handed over to the nominee(s) as decided by the policyholder.
Paying premiums will help lead to tax-free life: If you wisely invest in an insurance policy, your tax is exempted under Sec 80 C and 10 (10D).
Maturity Benefit - Once the insurance policy is over, you can get back all the premiums paid with the interest over them. Sounds cool, right?
Buying the appropriate type of life insurance (along with Riders) can help mend your life as per the welcome and unwelcome events in life.
What are the best life insurance to view for wealth creation?
In this blog section, we will see some of the best life insurance plans that one can use to have a steady, secure, and beneficial wealth creation.They are as follows:
Aditya Birla Sun Life Insurance DigiShield Plan
This term insurance plan of ABSLI is also known as the 'Sabka Vala Term Plan' because it is a complete all-in-one plan that can protect numerous requirements based on int stages and needs in life scenarios.
This unique term insurance plan comes with ten plan options from which to pick based on your needs, and they are as follows:
- Level Cover Option
- Increasing Cover Option
- Sum Assured Reduction Option
- Whole Life Option (Level Cover)
- Whole Life Option (Sum Assured Reduction Cover)
- Income Benefit
- Level Cover plus Income Benefit
- Low Cover Option
- Level Cover with Survival Benefit
- Return of Premium (ROP)
Terminal Illness Benefit: let's assume that you are diagnosed with a chronic illness. At this point, you will need money the most, and this is when your term insurance will come in handy. When the Policy is in force, you will receive a lump-sum payment equal to 50% of the applicable amount guaranteed, up to a maximum of Rs. 2 crores, and all future premiums will be canceled.
When you hit 60, you will be entitled to monthly survival benefits. It means no more relying on others when a wise investment may pay you back when you need it most.
Under this plan, the death benefits may be paid out in monthly installments, lump sums, or both. Examine the plan option you have selected.
Aditya Birla Sun Life Insurance Life Shield
This term insurance plan includes a customized plan Option that allows you to select from eight distinct plan alternatives based on your family's needs, guaranteeing that they do not have to sacrifice their lifestyle even in your absence.
They provide eight plan alternatives from which to pick based on one's needs, and they are as follows:
- Level Term Assurance
- Level Term Assurance with Waiver of Premium (WOP) Benefits
- Increasing Term Assurance
- Increasing Term Assurance with Waiver of Premium (WOP) Benefits
- Decreasing Term Assurance
- Decreasing Term Assurance with Waiver of Premium (WOP) Benefits
- Return of Premium
Joint Life Protection: With this advantage, you can accompany your wife. The relevant Sum Assured of your spouse will be half of your applicable Sum Assured. It completes one of the vows of the wedding to take care of your wife till death.
Return of Premium option: This benefit specifies that if you live to the end of the insurance term, the insured will be refunded for the whole amount of all premiums paid on the policy maturity date (check for the Option plan).
Enhanced life stage protection: With this benefit, you may expand your coverage after each event (marriage and kids) without having to do a medical exam.
Waiver of Premium: If the life insured suffers from total and permanent incapacity or severe illness when the policy period is active, future premiums will be waived, and the plan's death benefit will remain unaffected.
Conclusion
It might look like a long list of tasks but don't worry. All you need is a source of income, patience, an emergency finance base, and calculated moves for decent wealth creation.Still, if you feel that you are lagging, contact a financial advisor who can get you a better idea about wealth creation and the feasible means to attain it.
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