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5 Easy Steps to a Healthy Financial Life

5 Easy Steps to a Healthy Financial Life
Did you know that in 5 simple steps you can gain not only full awareness but also complete control over your financial life?
Let's see what these steps are:

1. Know Where You Stand

Unless you know what your current financial situation is, it might be difficult for you to know what you want to work towards achieving. Often people are unaware of what assets they own.

For example, a recent experience with a 33 year old client went something like this:

Client: "I have no assets as such, so my financial plan should be only based on building up assets to achieve my goals. Luckily I also have no liabilities so we can have a clean start on my plan"

Planner: "OK, let’s go through this step by step and we’ll see what exactly your current net worth is. Do you currently have a PPF account?"

Client: "Yes... I should have about Rs. 15 lakhs in it so far, but this was started for me by my parents when I was a minor."

Planner: "If the account is in your name, it becomes your asset. What you use this money for is then up to you and your family to decide. How long have you been working?"

Client: "Exactly 10 years now."

Planner: "You will have built up a significant EPF corpus as well in that case. Have you been contributing the minimum Rs. 780 per month or have you been contributing 12% of your Basic?"

Client: "I originally contributed 12% of my Basic, but I switched jobs about years ago and went to Rs. 780 per month thereafter..."

Planner: "So you have PPF and EPF. You must have been making tax saving investments into mutual funds as well?"

Client: "Yes every year I invest about Rs. 20,000 to Rs. 30,000 in some tax mutual fund scheme..."

By the end of it, the client was surprised at how much he was actually worth, with just haphazard absent-minded investing. He was also surprised to note that the credit card outstanding balance counted as a liability and had been previously unaware of the very high interest (almost 18% p.a.) charged on the outstanding balance.

Only when a client knows where he stands, can he understand how to proceed.

2. Know Your Cash Flows

This is an interesting exercise. Take a pen and paper and on one side list all your incomes i.e. salary, business, rental income, etc. A lot of individuals have one primary income stream i.e. salary. Now on the other side list your expenses, clubbed into broad categories. Some of these will be guesstimates. For example various expense categories can include rent, groceries, household maintenance, travel, fuel, utilities i.e. electricity, gas, cable, cellphone, and discretionary expenses such as eating out, shopping, entertainment etc. You can even factor in annual travelling expenses, divided by 12 to take them on a proportionate monthly basis. From your income and expenses you will arrive at your monthly savings figure each month. Wherever possible, see if you can cut down on your expenses and channelize this extra saved amount towards your contingency fund (at least 6 to 24 months expenses) or your goal based investments.

3. Know Your Bank Balances

Often we have multiple bank accounts. Know what you have in each account, and if possible, assign certain inflows and outflows to specific accounts. This will help be more organized financially. Another way of doing this is to have just one account, and you will automatically manage all your cash flows out of this account.

Some banks offer the option of a flexi deposit. This is basically a fixed deposit (with FD rates of interest) that also offers you the flexibility to withdraw from it anytime you want, even using your debit card. The benefit here is that you earn much more interest than a normal savings account, while enjoying the same flexibility and no lock-in of your money.

4. Know Your Goals

Goals, aspirations, desires - we might have different words for the things we want to achieve, but no matter what we call them, if we don’t take concrete steps to achieve them, we might as well call them dreams. Here is an example list that can help you get a better idea of what your own goals might be:
a. Buy a car worth Rs. 12 lakhs in 5 years
b. Buy a property as an investment worth Rs. 50 lakhs in 8 years (loan)
c. Take international family holiday to Spain for 1 week in December this year, worth Rs. 4 lakhs.
d. Send daughter to university at her age 21 for post graduation, worth Rs. 40 lakhs
Fund daughter’s wedding for Rs. 15 lakhs, at her age 25
e. Retire early, by the age of 50, earning Rs. 1 lakh per month from my investments.

5. Have a Plan to Achieve Your Goals

Knowing where you stand, taking stock of your cash flows, assets and liabilities, savings and investible surplus is all well and good. But if you don’t have a plan to achieve your goals, then you are going to run the risk of haphazard investments and not achieving your goals. Each goal that you have should have a dedicated investment portfolio, comprising equity and debt investments, depending on the time horizon to your goal.
For example, if a goal is 10 years away, you can have up to 70-75% exposure to equity investments, 10% in debt and 15% in gold by way of an ETF. For a goal that is less than 3 years away, opt for a 100% debt portfolio so that you don’t expose your investments to stock market volatility.

Sometimes, the simplest ways to do things have the cleanest and best results. The benefit of conducting these 5 steps include a greater level of awareness, more financial control and a sense of purpose that will greatly increase your chances of achieving your life goals.
By PersonalFN

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PME Due Date

Master Circular No. 25

Copy of Railway Board’s letter No. 69/H/3/11 dated 06.12.1974

Subject: Implementation of the Recommendations of the Visual Sub-Committee.

6. Periodical re-examination of serving Railway Employees:

6.l. In order to ensure the continued ability of Railway employees in Classes A l, A 2, A 3, B l and B 2 to discharge their duties with safety, they will be required to appear for re-examination at the following stated intervals throughout their service as indicated below:

6.1.1. Classes A l, A 2 and A 3 —At the termination of every period of three years, calculated from the date of appointment until they attain the age of 45 years, and thereafter annually until the conclusion of their service.

Note: (l) The staff in categories A l, A 2 and A 3 should be sent for special medical examination in the interest of safety under the following circumstances unless they have been under the treatment of a Railway Medical Officer.

(a) Having undergone any treatment or operation for eye trouble irrespective of the duration of sickness.

(b) Absence from duty for a period in excess of 90 days.

(2) If any employee in medical category A has been periodically medically examined at any time within one year prior to his attaining the age of 45, his next medical examination should be held one year from the due date of the last medical examination and subsequent medical examination annually thereafter.

If, however, such an employee has been medically examined, at any time earlier, than one year prior to his attaining the age of 45, his next medical examination should be held on the date he attains the age of 45 and subsequent medical examination annually thereafter.

Ammendment: It was ammended in 1993 as below

Age Group PME Due

Age 00-45 every 4yrs

Age 45-55 every 2yrs

Age 55-60 every year
As per Rly Bd's Guideline of Medical Exam issued vide LNo. 88/H/5/12 dated 24-01-1993

a) PME would be done at the termination of every period of 4 years from date of appointment / Initial medical Exam till the date of attainment of age of 45 years, every 2 years upto 55 years & there after annual till retirement.
b) Employees who has been periodically examined at any time within 2years prior to his attaining the age of 45years would be examined after 2years from the date of last PME & subsequent PME for every 2years upto 55years age.Of

NRMU 4 you

6.1.2. Classes B-1 and B-2—On attaining the age of 45 years, and thereafter at the termination of every period of five years.