We all are so confused when we start earning that how to manage our funds as we are seldom taught about personal finance in schools and colleges.
“You can’t control the national and global economy. You can only control their impacts on your personal and family economy.”
― Omony Geoffrey Ocaya
Here are 5 things to start your journey.
- Start an emergency fund: Thumb Rule is to save for at-least 6 months of your current expenses.
- Never mix your investment with insurance. Stay away from Hybrids like ULIPS and other fancy products which offer Insurance as well as returns. Buy seperate health insurance and term insurance and invest your savings in pure investment products.
- Understand the power of compounding: Start early no matter how small investment it is. Start with passive investment products which require little financial knowledge like Mutual Funds, ETFs and slowly-slowly when your acquire knowledge diversify your portfolio by buying different asset classes. Read Magic of Compounding for details.
- Stay on top of your Income tax:
- There are no free lunches: Never invest in anything which defy common sense or which seems too good to be true.
Read books on personal finance.
Some of my favourite books on personal finance. You can click on them to view them directly.
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