Spending = Earnings – Savings. A golden mantra which you should follow every month.
Start an SIP at a very young age. Try to invest at least 15 – 25% of your earnings every month.
Do not let this sentence scare you ever. “Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing”. Most people avoid investing in mutual funds just because of this one warning. Yes, there is a market risk, but do look at the history and the growth of mutual funds.
Avoid buying a car, unless you use it every day. Taking Uber/Ola would be a better choice in that case.
At least 20% of your wealth should be liquid as an emergency fund, so you can utilize it whenever necessary.
Never take unnecessary loans.
Avoid buying property on loans as it eats most of your earnings, unless you have a clear plan for its repayment. It’s important to monitor cash flow. Though, the house will be your asset, your liability will be much more.
Do not have a belief that property and car make you rich. It is what you save and invest, that is more important always.
Considering inflation, you are actually losing money if it is in a savings bank account. Do not keep huge corpus as savings in your bank account.
Never invest in insurance for returns. Insurance is not an investment option. It is just a risk management tool.
Never use Credit Cards for lavish spending. Use them intelligently and pay the bills before due date, to avoid hefty interests. Avoid EMIs as much as possible.
Cancel all credit cards before you die. Or inform family about all your accounts, credit cards, loans and savings, now itself. Even a small residue will cost your family much in the long run.
If you invest in stocks, pay due attention. Also try to have a separate account for Delivery investment and Intraday investment. It is easy to monitor this way and also makes tax calculation easy.
Always have a plan for future events on your career, life, spending and finance.
Always have a reserve on your savings for contingency and urgent situations.
Invest on yourself first and then make investments. Your personal life and health are the most important investments. Do have a regular health check and do healthy workout every day. Stay healthy and live happily!
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