Our relationships with our personal finances

1. Financial Stability
addressing needs – financially stress free
A person achieves financial stability when his/her Income (salary, business)
somewhat exceeds Expenses (daily expenses, emi, premium etc.).
• It refers to that stage where the basic needs of an individual or family
are properly addressed to and one achieves peace of mind vis their
current financial state of affairs.
• Most people spend a good part of their life just to be debt-free and
therefore attain true financial stability.
• This typically is the case when one starts his/her career and is suddenly
burdened with loans (student loans, personal Loans, car Loans, credit card)
taken out to experience new lifestyles or to manage responsibilities
which comes with age.
• In the process they go through the stress of their finances which effects
their personal and financial well-being.
• People mostly achieve financial stability when they are at least a decade
into their careers in their mid 30’s or 40’s.
How to achieve financial stability?
Financial Stability can be achieved by engaging in prudent cash flow
management, at an individual or family level, and thereby helping form lifelong
habits in financial well-being.
A meticulous planning to manage expense and cut cancerous outflows like high
interest debt servicing & or credit card is laid out to achieve Financial Stability.
Financial Stability provides an opportunity to save money and invest for future.
Income – salary or business Expenses – living expenses, emis, premium

2. Financial Independence
more choices - exploring options
Financial Independence is achieved when one does not depend upon
only one stream of income i.e. salary.
• This stage is typically marked by an increase in Income at a salary
level (individual &or partner) supported by some passive income
from side business &or investments.
• This additional income can be from investments, rental, retiral
benefits, side business, consultancy etc.
• It refers to the stage where one is not worried about the income
and live a fairly contented life.
• This could mean a second car, a second home, foreign vacations,
studies abroad etc. without creating additional liabilities.
• People mostly achieve financial independence when they are in
their middle age.
How to achieve financial independence ?
Financial Independence can be achieved by proper utilization of time and
resources.
A prudent investment plan, by following proper asset allocation helps build
revenue stream from different asset classes like stock markets, fixed deposits,
real estate, and pension funds.
Further by honing one’s talent and skill set it is possible to start a part time
business. This can be a great step in one’s entrepreneurial journey.
Achieving financial independence does not mean one is rich or living the
lifestyle one aspires to. All it means is that one does not need a one job to be
able to afford one’s current standard of living.
Income – active & passive Expenses – living expenses, emis, premium

3. Financial Freedom
wealth creation – fulfilling aspirations
Financial Freedom is achieved when one has wealth to indulge in
finer lifestyles without worrying too much about the cost.
People who have created wealth, through smart financial
planning at every stage and endeavors, achieve this state. It is
commonly referred to as being ‘Rich’.
How to achieve financial freedom?
Wealth creation happens through entrepreneurial efforts or being part of the
profitability team in an organisation.
Most successful businessmen or people in the top hierarchy of an organisation
ends up in this category.
Wealth creation requires a very different mindset in terms discipline, efforts,
lifestyle, financial acumen, hard work & vision.
The key to becoming wealthy is to constantly glean knowledge, learn how
others became wealthy, understand the reasons behind successes and failures,
and then do the things that work. The rich don't just invest in things. They
invest in themselves.
Financial planning though an experienced, trusted and an entrepreneurial
financial planner goes a long way in achieving Financial Freedom.
At NorthStar we are your partner in the financial journey to
achieve financial happiness.
We add value to every step by putting together our experience in
wealth management and having an entrepreneurial mindset.

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In our next article we will talk about:
How the Rich Make Their Money?
Please call us at +919702739000 for a personal consultation on
the finer aspects of wealth management.

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