7 Financial Tips Everyone Should Know
Think before taking 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.
If you will drive daily in your car, then only plan to buy. Otherwise you can make use of public transport or can services
Start Planning Your Investments Early
- Try to save atleast 15–25 % of your earnings.
- Have a reserve on your savings for contingency and urgent situations.
- Do not let this sentence scare you. “Mutual fund investment are subject to market risk. Please read the offer documents carefully before investing”. Most people avoid investing in mutual funds just because of this one warning. Yes, there is a market risk, but look at the history and growth of mutual funds.
Do not invest all your money
- Atleast 20% of your wealth should be liquid so you can utilize it when necessary.
- Considering inflation, you are actually losing money if it is in savings bank account. Do not keep huge money in savings bank account.
Be cautious before investing in Shares and stocks
- If you invest in stocks, pay due attention.
- Have a separate account for delivery investment and Intraday investment. It is easy to monitor this way and also makes tax calculation easy.
- Invest in insurance for returns. Insurance is not an investment option. It is a risk management tool.
- Never use credit cards for lavish spending. Use credit cards intelligently and for needs not for wants.
Invest in yourself and your family’s future
- Your personal life and health are the most important investment. Do have a regular health check and take care of yourself.
- Always remember death can come anytime. Make adequate term Insurance, if you have dependents.
- Plan and prepare your will, in advance
Keep all information secured with a Family Member
Inform your family about all your accounts, credit cards, loans and savings. Even a small residue will cost your family much.
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