From asking question like ‘How much should I save monthly’ to ‘making a Will’, I grew up. I learnt. I took care of my finance journey. Here is the snapshot of what I did, how I did and what it has led to. The idea is to share with all of you so that you can also embark on the journey and achieve what you always wanted to. During the past 18 months, I have done the following to increase my learning on the subject:
Top 10 Highly Useful Tips to Learn About Personal Finance for Free
Till 18 months back, I was a noob. I had no clue of my finances. They were all over the place from having five saving bank accounts to owning stocks of 16 small cap companies I had not even heard of. This was my story till Mar’19. Then things changed. I got an opportunity to work with Mr. Dhirendra Kumar from Value Research (for one of the office projects). This changed me. Forever. I somehow got interested in the subject and dived into the ocean of learning.
1. Listened to Value research (by Dhirendra Kumar) videos in loop
I spent hundreds of hours in listening to Dhirendra Kumar on my way to and back from office [Thane to Dadar] i.e. I listened to him for 3 hours a day. This was the starting point and made me understood various aspects of personal finance. I will remain indebted to him forever. Hours spent listening to him has done me wonders. I don’t think if there could be a better way to start my journey.
2. Read various books on the subject
Let’s talk money by Monika Halan – Read it twice. Reinforced the concepts, created to-do list that I had to complete if I had to take care of my finances. Absolute legendary stuff.
Rich dad poor dad – Read it twice. Helped me understand the importance of passive income, how rich think and what differentiate rich from a common man – they create money, they make fast decisions when opportunity come knocking on your door.
You can be rich too by Pattabiraman Murari and PV Subramanyam – Read it twice. Understood the technicalities of how time in the market is supreme vis-à-vis return and amount, how to evaluate a mutual fund.
Retire rich by PV Subramanyam – understood the basics of Retirement
Coffee Can Investing by Sourabh Mukhurjea – Understood that you don’t need to find hidden gems to make money. The gems are right in front of you. CCI framework is ought to be one of the simplest and useful frameworks in stocks selection.
The Warren Buffet Way by Robert Hagstrom – Understood what’s in the mind of WB (if I can say so). Again, learnt how money can be made in investing in the giants like Coca Cola, IBM. You don’t have to delve deeper into small cap. Understood importance of behavioural finance.
The unusual billionaire by Sourabh Mukhurjea – Fascinating stories of key Indian power houses.
3. In addition to this, have been following various investors/fund managers
Listened to each episode of BQMFShow – Thanks Niraj Shah, Vikas Mantri, Nilesh Shah, Nimesh Shah, Radhika and other countless people.
Listened to countless interviews of legends i.e. Rakesh Jhunjhunwala, Ramesh Damani, Sourabh Mukhurjea, Vijay Kedia, Ramdeo Agarwal, Madhu Kela to name a few. https://www.youtube.com/embed/x8-houvaP0s
4. Have been following the AIFW FB group
Thanks to each of the 65,000 members who have been asking all kinds of questions in the group. Have learnt what to do and more importantly what not to do.
So, after spending enormous amount of energy, time and money in doing these things, I could finally lay down a 62-points to-do list which I had to complete if I had to take care of my finances. Few months later, I am a man with a plan – from next vacation to retirement, everything is sorted.
I am at peace with my finances, finally. No noise in the market, friends circle, group can unnerve me. I am now on an indifference curve. And what has been the result of this? Here it goes: –
Have 2 Saving Bank accounts from five back then, Four credit cards are reduced to two
6. 6 months Emergency fund in FD
Emergency can occur anytime. It is always best to keep some amount in reserve in case of emergency situations.
Term insurance (4.5 Cr), 1 Cr health insurance (normal + super top-up), Cancer insurance, Personal accident insurance (Partial and total disability), Corona Kavach, Bank locker insurance and by god’s grace will be out of all endowment plan by Apr’21. I was able to reduce the term of my LIC policies from 31 years to 10 years. Yes, it can be done. All it takes a 59/- receipt.
Plan to use term insurance – have not only bought term insurance but have created a plan on how money will be used when I am not there. Have told my wife what to do, how to use money. Have handed over the list of fee-only financial planners she can reach out to execute the laid down plan. Thanks to Monika Halan for this. Had never knew how important this is.
All of them are in place from bank FDs to EPFO for both wife and me. And I know nominations are not enough.
A detailed 20-page Will is ready. Have not been able to get it signed yet due to Corona, but it is ready. It will be signed by two witnesses the next week. Have made all the Goals from vacation till retirement. And yes I know that the Retirement is the most important goal.
10. Asset allocation
Not a big fan of a ratio as I believe in goal-based investing. A 45 years old with no major expenses in sight may go 90% into equity as compared to a 30 years old person who can’t go into equity if he/she can look at nothing but expenses.
- Real estate – will not invest in RE if I am not living in it.
- Mutual funds – I had 16 MFs. Don’t know why I had them. Consolidated them to 4. I know why I have them in my portfolio. What is their role.
- Stocks – I had stocks of those 16 companies I had no clue about. I had done away all losers, and now owns 6-7 high quality stocks who have well-established Moats in their respective areas.
Everything is documented in an excel sheet which is mailed to my wife every month. These 18 months have been one of the most significant periods in my life which, I am sure, will define how well I going to do financially in times to come.
Personal finance has now become a hobby – my passion. If I am not working on my job, then I am either reading a book on the subject or listening to someone related to the subject.
In the month of May, I thought of sharing my knowledge with my family/friends – Thanks to the book I read ‘5 AM Club by Robin Sharma’ – one of the learning of the book was to share the knowledge.
I then organized online sessions (10 sessions of 1.5 hours each) on personal finance and trained 20 people on personal finance. I pushed at least 15-20 people to buy all kind of insurances ranging from term to health to personal accident. I feel proud that people are more secure now (because of me) than they were before.
I feel thrilled as I share this journey of mine with all of you. Thanks to each and everyone of you, all aforementioned resources, all people I had mentioned above who have helped me get the clarity I needed on the subject. As they say, the fun is in the journey and not the destination. So, I will keep learning and growing.
Top 10 Highly Useful Tips on Personal Finance for Free
Personal finance is a critical but often overlooked aspect of life. Many people struggle to make ends meet, let alone save for the future. However, taking control of your finances is essential to financial health and well-being.
There are a number of simple things you can do to get your finances in order. Here are ten highly useful tips on personal finance for free:
1. Make a budget and stick to it.
2. Pay yourself first. Make sure to set aside money for savings and investments before spending on other things.
3. Live below your means. Spend less than you earn and resist the urge to keep up with the Joneses.
4. Get rid of debt. High interest debt is a major drain on your finances. Pay it off as quickly as possible.
5. Invest in yourself. Invest in your education and career so you can earn more money.
6. Invest for the long term. Don’t try to time the market, but instead focus on investing for the long haul.
7. Diversify your investments. Don’t put all your eggs in one basket. Spread your money around to reduce risk.
8. Have an emergency fund. Set aside money for unexpected expenses so you don’t have to go into debt.
9. Make a plan. Having a financial plan will help you make smart decisions about your money.
10. Seek professional help. If you’re having trouble getting your finances in order, seek out a professional financial advisor.
Top Highly Useful Tips on Personal Finance for Free
There are many things that you can do to improve your personal finance for free. Here are ten highly useful tips that will help you save money and make better financial decisions:
1. Make a budget and stick to it.
2. Live below your means.
3. Invest in yourself by taking courses and learning about personal finance.
4. Stay disciplined with your spending.
5. Have an emergency fund to cover unexpected expenses.
6. Invest your money wisely.
7. Avoid debt.
8. Live a healthy financial life by making smart choices with your money.
9. Give back to your community through charitable giving.
10. Plan for your financial future by setting goals and creating a retirement plan.
Tips to Save Money and Get Out of Debt
Assuming you are in debt and would like to get out, here are 10 tips to help save money and get out of debt:
1. Make a budget and stick to it. This will help you track your spending and see where you can cut back.
2. Try to pay more than the minimum payment on your debts each month. This will help you get out of debt faster.
3. If you have credit card debt, try to transfer the balance to a card with a lower interest rate. This will save you money on interest charges.
4. Make a plan to save money each month. Automate your savings so that you don’t have to think about it.
5. Invest in yourself by taking courses and learning new skills. This will help you earn more money and get out of debt faster.
6. Live below your means. This means spending less than you earn each month.
7. Use cash instead of credit. This will help you stay within your budget and avoid debt.
8. Save for emergencies. This will help you avoid using credit cards or loans when unexpected expenses come up.
9. Invest in yourself by taking care of your health. This will help you save money on medical bills and stay out of debt.
10. Make a plan. This will help you stay on track and get out of debt.
Tips for Building Your Savings
Saving money is a key component of personal finance, but it can be difficult to do if you don’t have a plan or don’t know where to start. Here are 10 tips to help you get started building your savings:
1. Start with a goal in mind. What do you want to save for? A rainy day fund, a new car, a down payment on a house? Having a specific goal will help you stay motivated to save.
2. Make a budget. Knowing how much money you have coming in and going out is crucial to saving money. Track your spending for a month or two to get an idea of where your money goes, and then make adjustments to ensure you have money left over to save.
3. Automate your savings. Set up a direct deposit from your paycheck into your savings account, or have a certain amount transferred from your checking account each month. This way, you’ll never even see the money and won’t be tempted to spend it.
4. Save your windfalls. When you get a bonus at work, a tax refund, or any other unexpected money, put it straight into savings. This will help you reach your goal faster.
5. Invest in yourself. If you’re not sure what to do with your money, investing in yourself is always a good idea. Consider taking a financial planning course or hiring a financial advisor to help you make the most of your money.
6. Live below your means. One of the best ways to save money is to simply spend less than you make. That may mean making some lifestyle changes, such as downsizing your home or giving up your car, but it will be worth it in the long run.
7. Make it a game. Saving money doesn’t have to be boring. Challenge yourself to see how long you can go without spending any money, or see how much you can save in a month or year.
8. Use cash only. Another way to make saving money more fun is to use cash only for a certain period of time. This will force you to be more mindful of your spending and help you save more money.
Tips for Investing Your Money
There are a number of things to consider when it comes to investing your money. Here are 10 tips to keep in mind:
1. Consider your goals. What are you hoping to achieve by investing? Are you looking to grow your wealth, generate income, or both?
2. Consider your risk tolerance. How much risk are you willing to take on?
3. Consider your time horizon. When do you plan on selling your investment?
4. Consider your investment options. There are a variety of investment options available, so make sure to do your research and choose an option that best suits your needs.
5. Consider your costs. Make sure to factor in any fees or commissions associated with your investment.
6. Consider your tax implications. Different investments are taxed differently, so make sure to consider how your investment will be taxed.
7. Consider your liquidity needs. How easy do you need your investment to be to sell?
8. Consider your diversification needs. How diversified do you want your portfolio to be?
9. Consider your rebalancing needs. How often do you need to rebalance your portfolio?
10. Consider your exit strategy. What is your plan for selling your investment?
These are just a few things to keep in mind when investing your money. Be sure to do your own research and consult with a financial advisor to ensure that you are making the best decision for your unique situation.
Tips for Spending Your Money Wisely
There are a lot of things that you can do in order to spend your money wisely. One of the most important things that you need to do is to make sure that you have a budget. This will help you to track your expenses and make sure that you do not overspend.
Another thing that you need to do is to save up for your future. This means that you need to put some money into savings account so that you will have something to fall back on in case of an emergency. You should also make sure that you invest your money wisely. This means that you should not put all of your money into one investment. Instead, you should diversify your investments so that you can minimize your risk.
Tips for Budgeting Your Money
Assuming that you have some money to start with, here are tips on how to budget it wisely:
1. Determine your net income. This is the money you have coming in each month, after taxes and other deductions.
2. Make a list of your fixed expenses. These are the expenses that stay the same each month, such as your rent or mortgage, car payment, and insurance.
3. Make a list of your variable expenses. These are the expenses that can vary from month to month, such as groceries, gas, and entertainment.
4. Determine how much you want to save each month. This can be for long-term goals, such as retirement, or for shorter-term goals, such as a vacation.
5. Determine how much you can spend each month. This is the money you have left after you’ve saved what you want to and paid your fixed and variable expenses.
6. Track your spending. This can be done by using cash only, or by using a budgeting app or spreadsheet.
7. Make adjustments to your budget as needed. If you find that you’re spending more than you’d like in one area, cut back in another.
By following these tips, you can ensure that your money is going where you want it to and that you’re prepared for financial emergencies.
Tips for Managing Your Money Better
There are many things that you can do to manage your money better. Here are 10 highly useful tips on personal finance that can help you save money and make better financial decisions:
1. Make a budget: One of the best ways to manage your money is to create a budget and stick to it. Determine your income and expenses and track where your money is going each month. This will help you to make informed decisions about your spending and saving.
2. Live below your means: It is important to live within your means and not spend more money than you earn. This may require making some changes to your lifestyle, but it is worth it in the long run.
3. Save money: One of the best ways to manage your money is to save money. You should create a savings plan and make regular contributions to your savings account. This will help you to build up a financial cushion in case of an emergency.
4. Invest money: Another great way to manage your money is to invest it. This can help you to grow your wealth over time. There are many different ways to invest your money, so be sure to do your research before making any decisions.
5. Stay out of debt: It is important to stay out of debt as much as possible. This means avoiding unnecessary credit card debt and paying off any debt that you do have. Debt can be a financial burden and can make it difficult to manage your money.
6. Make a plan: It is important to have a plan for your finances. This means setting goals and making a budget. Without a plan, it can be easy to make impulse purchases and end up in debt.
7. Be disciplined: One of the most important aspects of personal finance is discipline. This means sticking to your budget and not spending more money than you can afford. It can be difficult to be disciplined, but it is essential for managing your money.
8. Be patient: Another important aspect of personal finance is patience. This means not trying to get rich quick. Instead, focus on making small, consistent steps towards your financial goals.
9. Learn about money: One of the best ways to manage money to learn about it more by reading books and watching videos.
Tips for Financial Planning
Financial planning is one of the most important things you can do for yourself and your family. It can help you save money, invest wisely, and make the most of your financial resources.
There are a number of things you should keep in mind when financial planning, and these tips can help you get started:
1. Make a budget: This is perhaps the most important step in financial planning. By making a budget, you will be able to track your income and expenses and see where your money is going. This will allow you to make adjustments to ensure that you are spending within your means.
2. Invest in yourself: One of the best investments you can make is in yourself. This can include things like taking courses to improve your job skills or investing in your education.
3. Live below your means: It is important to live within your means and not try to keep up with the Joneses. This means spending less than you earn and saving the rest.
4. Make a plan: A financial plan can help you reach your financial goals. This plan should include your budget, as well as your investment and savings goals.
5. Invest for the future: It is important to save for the future, especially if you have long-term goals. This can include things like retirement or a rainy day fund.
6. Stay disciplined: Discipline is key when it comes to financial planning. This means sticking to your budget and not impulse buying.
7. Review your progress: Periodically review your financial situation to see how you are doing. This will allow you to make any necessary adjustments to your plan.
8. Seek professional help: If you are having trouble with your finances, seek professional help. This can be in the form of a financial planner or counselor.
9. Be prepared for the unexpected: Life is unpredictable, and you should be prepared for the unexpected. This can include things like an unexpected job loss or medical emergency.
10. Have a backup plan: If your financial situation changes, have a backup plan in place. This could include things like downsizing your lifestyle or finding another source of income.
Tips for Retirement Planning
There are many things to consider when planning for retirement. Here are 10 tips to get you started on the right track:
1. Start saving early. The sooner you start saving, the more time your money has to grow.
2. Make saving a priority. Make sure to set aside money each month to save for retirement.
3. Invest your money wisely. Consider using a mix of investments to help you reach your retirement goals.
4. Consider using a 401(k) or IRA. Employer-sponsored retirement plans like 401(k)s can be a great way to save for retirement.
5. Know how much you will need. Estimate how much money you will need to have saved for retirement.
6. Make a budget. Track your spending and make sure you are staying on track with your retirement savings goals.
7. Live below your means. Consider your lifestyle choices and make sure you are not spending more than you can afford.
8. Have a retirement plan. Make sure you have a solid plan in place for how you will retire.
9. Stay disciplined. Retirement planning requires discipline and dedication.
10. Get professional help. If you need help, consider working with a financial advisor.
Tips for Saving for College
Saving for college can seem like a daunting task, but it doesn’t have to be. Here are 10 tips to help you get started:
1. Start early. The earlier you start saving for college, the more time your money has to grow.
2. Set a goal. Determine how much you need to save and make a plan to reach that goal.
3. Save regularly. Make saving for college a part of your regular budget.
4. Use a 529 plan. A 529 plan is a tax-advantaged way to save for college.
5. Invest in yourself. Invest in your own education by taking advantage of free resources like online courses and scholarship search engines.
6. Get creative. There are a number of ways to save for college outside of traditional savings methods. Consider side hustles, selling unwanted items, or earning rewards points.
7. Reduce your costs. One of the best ways to save for college is to reduce the costs of attending in the first place. Look for ways to save on tuition, fees, and room and board.
8. Shop around for financial aid. Don’t assume that you won’t qualify for financial aid. Shop around and compare offers from different schools.
9. Consider student loans. Student loans can be a helpful way to finance your education, but be sure to compare rates and terms before borrowing.
10. Stay focused. It can be easy to get discouraged when saving for college, but remember why you’re doing it and keep your eye on the prize.