Learn Trading Under The Guidance of Vivek Bajaj + 4 Mentors - Know More

Financial Planning

How To Plan For The Different Stages Of Life?

Planning is required at different stages of our life, especially financial planning. So, let us begin this section by answering the below question: 


Why Should We Plan?


Have you heard of this thumb rule for investing in equity?


It states that you should have (100 - Your Age) % of your net wealth in equity. So if you are 40, you should have 60% of your net wealth in equity. 


But is this necessarily correct? 


Your equity exposure depends on the proximity to your goals, and it is very doubtful that anybody has only one financial goal in their lives. Therefore, a single equity percentage based on your age cannot apply.


Two generations ago, life was comparatively much simpler financially. You would go to school, maybe to college, get married in your 20s, have children by your 30s, work in one company for almost your entire working life, buy a home on retirement, and retire peacefully by 60. 


Things are different now. Creating a successful and powerful plan for your financial life in today’s times has very little to do with your age and a lot to do with major life stages / events when you make the plan.


Therefore, for maintaining our financial well-being throughout our life, we need each stage of our life to be carefully planned out from a financial point of view.


Let us discuss the planning for each of the three major stages of our lives-

  1. Our first job
  2. Marriage and settling down
  3. Financial freedom

We will elaborate our discussion on each of the three stages of life in the subsequent sections.

Did you like this unit?

Units 15/35