Ask any person what is their biggest asset? Well it sets them thinking….and then the facts…

Most people do not know what is their biggest asset. They then say – it is ‘ my house’ , ‘my equity portfolio’, my car, etc.

However then I lead them to the next question:

Have you borrowed for your house?

They jump and say yes. My house cost me 93 lakhs – i put Rs. 12L of my own and borrowed Rs. 81 lakhs…or so goes the discussion.

Is this a home loan? They say yes. I ask them what is the security that you gave…they think it is the house. It is not.

You do not get a house loan, a car loan or a personal loan. What you get is a loan against your FORM 16 – it is an assumed capability to create income in the future ALSO.

So your biggest asset is ‘your ability to create the net cash flows which can repay the loans’ – that is your earning power.

What can affect your earning ability / power to bring in the cash flows?

Early death, Critical Illness, Disability – and these are the risks that you run. Thankfully these are all insurable risks.

One more very big factor affects your earning ability if you are in service – RETIREMENT. Learn about saving / investing for your retirement.

Read India’s latest book on Retirement planning – or a Retirement Guide by an Indian author “Retire Rich Invest Rs. 40 a day” – see the page on ‘about the book I have written’ button…you will find greater details.

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  1. disability in India is still treated as accidental, there is no insurance for disability due to illness, one of my friend has all kind of insurances, but due to some nerve issue his bottom half (hip and below) stopped working and he is unable to work, now this is not because of accident so insurance company denied the disabiliy claim as their long clause clearly says disability due to illness not covered, still waiting for a insurance which covers disability due to illness.

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