7 Steps to Financial Success!

When it comes to financial planning in Dubai or anywhere else in the world, people expect advice regarding investments, insurance or any other financial that is simple, one best for all strategies that they can implement easily in their lives. What people often tend to ignore is that there is no one single solution. The simple reason being that everyone is different – with different goals, knowledge, responsibilities, appetite for risk, energy and time. The road rode towards achieving your ultimate financial goal is personal to you and you alone. The journey for the ultimate financial planning in Dubai begins at determining what you exactly want.

What is Financial Success for You?

When you think about wealth, you should look at it as a means of achieving the following:

• Security: The aspiration to protect yourself and your close ones from unfortunate situations that can occur in the future can be achieved by holding strong monetary assets.
• Physical Comfort: You can achieve better comfort physically if you hold strong monetary assets.
• Mental Comfort: Being sure about the fact that you have prepared well for any uncertainties that life may throw at you brings you a sense of mental peace, satisfaction, and comfort.

A series of financial milestones that you wish to achieve by a specific time span in your life should define your financial success. For instance, you may wish to purchase your own house by the age of 30. These milestones help in determining the amount and composition of your asset portfolio which tends to vary with time as you achieve milestones.

Key Principals for Proper Financial Planning in Dubai

Here are 7 keys that can help you have a smooth journey towards achieving the financial success you desire.

Need Vs. Want

The first rule most of us need to understand and implement is – spend less than you earn.  It is important for you to understand the difference between a want and a need. For example, you may want a luxury car with the latest interior and GPS system, whereas, what you need is a reliable mode of transport to travel from one place to another. You should try your best not to be tempted by any such advertisements. It is best to use your money for things that are essential and put the excess towards future savings.

Go With Your Gut

There is only one person who has your best interests at heart and that is you. The financial decisions that are made by you or someone on your behalf are for you and your family as the ultimate beneficiaries. This is why it is extremely important to understand thoroughly any financial move you may be asked to make.

Honor Your Responsibilities Towards Your Loved Ones

Always remember, you are not the only one who is to bear the circumstances if an unforeseen situation is to occur in the future, your family is also going to bear the emotional and financial consequences. There are several instances that could occur such as a critical illness, loss of a job, disability, or death. Any such obligations can be met with three kinds of insurance:

• Health Insurance: Health insurance should be number one on every person’s financial priority list. This is because there is a high probability of facing an illness or medical condition or accident that involves a high medical expense.
• Life Insurance: It is important for one to hold life insurance so that there is no financial burden on the dependents after the untimely demise of the breadwinner of the family. m
• Disability Insurance: There is a possibility to meet with a disability that keeps you from working for a specific period. It is essential for one to have an income replacement during any such span.

Form an Emergency Fund

Life is unpredictable and bad things can happen at any time and to anyone. It is suggested that your emergency fund should be worth at least your six months’  income in any savings or cash account. It is ideal to keep your emergency fund in low-risk security. It is not sensible to invest in funds that are very volatile in nature.

Understand the Importance of Time

Financial security is not a sudden miracle, it involves a lifetime of accumulation. Time and consistency in investment can result in a large sum of wealth. You should establish the financial habit of making some investment no matter what the size maybe, on a monthly basis.

Diversification is The Key to Financial Planning in Dubai

There is a wide range of investments with different characteristics that can be considered while financial planning in Dubai. Common stocks are a popular investment tool amongst beginners because the prices are available and the purchase and sale are easy. There are other options such as equity stocks, real estate, etc.

Regardless of your choice of investment, you should always remember that there is volatility involved in all kinds of instruments. The prices tend to go up and down based on the number of sellers and buyers at a specific time.

Learn to Relax!

Risk tolerance is often defined as the ability to accept and cope with the unknown and unexpected. Everyone has a different appetite or tolerance for risk. It is not an ideal scenario to be constantly worrying about an investment that you are holding. There are numerous viable options in the market that can meet your objectives without causing as much of a worry.

Summing it Up!

These are a few key steps to put you in a financial situation with comfort no matter if you are a new investor or someone on the path for financial planning in Dubai for retirement.  Always remember – achieving security, especially financially, takes up a great portion of one’s life. If you make choices that are good and help you avoid financial disasters, you will spend your life enjoying the fruits of your investment.