Some very important financial tips that everyone should know and execute it for better life….
1. 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. A better idea is to stay on rent as rental yields are low. Secondly your liquidity will increase. Thirdly your investment corpus will increase. All this will result in more wealth creation.
2. Start a SIP at a very young age. Try to save atleast 15–25 % of your earnings.
3. Avoid buying a car unless you use it everyday.
4. 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.
5. Try having a simple wedding.
6. Most of your wealth should be liquid so you can utilize it when necessary.
7. Considering inflation, you are actually losing money if it is in savings bank account. Do not keep huge money in savings bank account.
8. If you invest in stocks, pay due attention.
9. Else a mutual fund portfolio is a better and sustainable option where an expert fund manager looks after your portfolio.
10. Do not have a belief that property and car make you rich. Its what you save and invest, that creates wealth.
11. Never invest in insurance for returns. Insurance is not an investment option. It is a risk management tool.
12. Never use credit cards for lavish spending. Use credit cards intelligently and for Needs not for Wants.
13. Cancel all credit cards before you retire. Or inform family about all your accounts, credit cards, loans and saving now itself. Even a small residue will cost your family much.
14. Invest on yourself and then on other investments.
15. Always try to balance your earnings with your savings first, then on spending and loans. Never take unnecessary loans. Always have reserve and utilise them.
16. Always have a plan for future events on your career, life, spending and finance.
17. Always have a reserve on your savings for contingency and urgent situations.
18. Your personal life and health are the most important investment. Do have a regular health check and do healthy workout every day. Stay healthy and live happily.
19. Always remember death can come anytime…..so please do buy adequate Term Insurance if you have dependents.
20. Prepare a Will. It may avoid unnecessary fights after you die.