Growing your wealth considerably takes a lot of effort. It involves adequate financial planning, managing uncertain expenses diligently, savings plan resources for the future, investing for growth and adequately forecasting retirement solutions. However, becoming wealthy is not definite. You cannot know exactly when you are affluent. After retirement, when you don't receive an employment income, if you can live a satisfying life with sufficient resources to manage sudden emergencies, you are certainly well-off!
 

Let us discuss some of the characteristics you must possess to generate wealth -.
 

1. Having a thirst for basic knowledge: It is often said that fundamental knowledge is always important to succeed in any field. Financial planning is the basis for a prosperous life. It is important to understand what financial planning means and how to achieve it.
    

   The first step towards financial planning is to have a budget. Learn how to make a good budget. Seek professional advice if required. You have to analyse your income sources and list down the expenses. Prioritise based on needs and then on wants and set aside a fund for a savings plan.
    

   Forecasting long-term financial goals while keeping in mind the inflation rates will help you plan better for a long-term financially secure living.
    

2. Having a wide vision - Becoming wealthy - is not just associated with your living. It includes family responsibilities and the extent to which they are self-satisfied at different stages in life. If you are the only earning member, you have to ensure that your family is financially protected even in your absence. There should be a guaranteed¹ regular income. Thus, insurance becomes necessary.
    

   Insurance companies offer guaranteed¹ returns insurance savings plans. With this plan, you will be paying a regular premium amount for a set policy duration. These premium amounts paid will suffice for a life cover, ensuring a sum assured to your family in the case of your demise. Additionally, you will be guaranteed¹ an annual income. You can receive the guaranteed¹ income as a lump sum, a combination of lump sum and guaranteed¹ annual income for a set period from maturity, or as a regular monthly income plan throughout life. 
    

   TATA AIA online offers a variety of guaranteed¹ savings insurance plans with customisable features and a host of other benefits.
    

3. Optimistic thinking towards growth - The economy of the world is never stable. Inflation rates and price rises have affected almost every single person in the world. We have to plan for investments to become prosperous and grow our wealth to have a satisfying life even after retirement.
    

   While thinking about investments, people are apprehensive about taking a risk. However, there are other insurance solutions, like Unit Linked Insurance Plans that will serve your needs. ULIP offers dual benefits, insurance and investment. One portion of the premium goes for a life cover, and the rest for investments in equity, debt or hybrid funds.
    

   On a comparative scale, the investments made here are safe and secure. You can take a risk and invest in equity funds for long-term benefits. You can also switch between funds when you feel the need. There is a lock-in period of five years, after which partial withdrawal is permitted. It is a plan that will give you good returns in the long term.
    







4. Defining Goals - You can make an effective financial plan only when you can define specific goals, and this will direct you in the right direction. The short-term goals can be specific such as higher education, purchasing a car etc., and long-term goals, like children's education, building a house, children’s marriage etc. While considering long-term goals, inflation rates will have to be accounted for. You can realise where you stand based on your finances and savings only when you set your goals right and measure the extent of achievement towards it all. 
    

5. Being disciplined - Becoming prosperous - is not just about defining goals, making a budget and a financial plan. It is also about the approach towards following it religiously. Discipline in terms of financial practices comes with a lot of patience. To ensure a guaranteed¹ regular income, you have to stay focused and pay premiums for many years. Neglecting to pay or withdrawing during the policy term will account for the relevant costs later. 
    

6. Efficient credit management - Credit facilities are always required in life. We cannot always have liquid cash to buy a car or a house. Availing loans and timely repayments will contribute to a - good credit score. This will later help you make productive investments to become a wealthy man.
    

   Also, a majority of people are not adept at handling a credit card. It is useful when it is used for making bulky purchases for availing EMI options. However, when we fall short of cash anytime, we habitually use credit cards and do not pay the bills regularly. This is a bad practice and needs rectification. Avoid unnecessary purchases and keep track of all your expenditures. If certain expenses cannot be budgeted, set a limit and try not to exceed them.
   
    

Can Life Insurance Help with Wealth Generation?
 

Life insurance is an essential financial planning tool that only helps you save regularly for future contingencies but can also assist in wealth generation. With a Unit-Linked Insurance Plan, the goal of accumulating more wealth over the years can be easily achieved. Moreover, while you continue investing your money over the years, the life insurance coverage under your policy protects your family. Therefore, in case of an unfortunate eventuality during the policy term, your family can be financially secure, even in your absence.
 

A ULIP as a single policy can offer life cover for your family as well as multiple investment opportunities through its varied fund options. Your risk appetite and profile will determine the type of funds you can choose. Moreover, a ULIP also enables you to select the sum assured life cover for your family’s protection. Over the years, you can focus on building and generating your wealth through your investments while this life cover acts as a complete and comprehensive financial security net for your family. This can be as flexible as you need it to be, depending on their needs and any other emergencies they may face in your absence.
 

Lastly, an important benefit of having a ULIP is that the lock-in period of 5 years allows your wealth to accumulate and grow undisturbed. After this period, you can make partial withdrawals and fulfil any short-term goals as needed. The premium you pay on a ULIP is divided between your investment and your life cover, which removes the hassle of paying multiple premiums for different benefits under your policy.

 

Conclusion
 

We have discussed some of the prominent characteristics that an individual should possess to become wealthy. Insurance for the wealthy and a guaranteed¹ regular income will let you stand by your financial objectives and help you grow your money. Understand the importance of insurance and its role in ensuring family security. Set a financial standard, define goals, plan for them and stay disciplined to become prosperous-.
 

L&C/Advt/2023/Mar/0985