You have worked hard to attain a good career and a steady income. You commute each day to be at work on time, and you give it your all when you are there. Yes, your job brings you great benefits such as your income, a progressive career path, and if you’re lucky, there’s a good social life too. Or maybe you have your own business, and are rewarded for your hard work by making good profits.
Just like you work hard to earn, you need to reverse roles by making your money work hard for you. How can you achieve this?
The first thing that you must do is to cover your expenses. Experts agree that you should first consider your non-discretionary expenses, those expenses that are absolutely necessary, such as accommodation, food and other monthly expenses. Once these expenses are met, look at your discretionary expenses - those expenses that you want to incur but can be avoided, such as vacations, movies and eating out. Calculate your monthly non-discretionary expenses and save a few months’ worth of these expenses (experts recommend 6 months), in case you suffer a loss of income. You can put these savings in your bank account which will earn you some interest as well.
Now consider your earnings after reducing your non-discretionary expenses.
Income - Non-discretionary expenses = Funds available for discretionary expenses and life goals.
This portion can be used for leisure activities and to prepare for your life goals. Set aside a sensible amount for leisure; now you have the remaining money available to work for you. In other words, this is the money that you need to invest.
Investing can be defined simply as putting money in an instrument with the intention of earning income or profit. Investments allow you to accumulate funds for your future life goals such as marriage, buying a house, retirement, travel, etc. The great thing is, if you start investing early in life, your investments will perform much better over the long-term. This is simply because of the magic of compounding. Compounding is when your money earns interest and that interest earns even more money for you in the future.
Now you know how much you have available to invest. The next step is to decide how to invest the money. Maybe you have considered fixed deposits, or are looking at the sort of investments that your parents have recommended, such as gold or real estate. You may have heard about other investment options such as bonds, stocks or shares, mutual funds and so on. Different investment products can help you plan for different financial goals depending on your risk and reward profile. We will learn about these ideas later. However, the most important thing to learn now is:
i) Cover your expenses
ii) Save for a rainy day
iii) Don’t let your money remain idle
iv) Start investing early to create more wealth.
You answered 2 out of 3 questions correctly, achieving an overall percentage of 67%.
Sign up for our newsletters.
Any information regarding securities offerings, or references to securities offerings, that are contained on these pages do not constitute or form part of any offer of securities for sale or the solicitation of an offer to purchase securities in the United States or in any other jurisdiction where such offer may be restricted.
The information in the coming pages is not intended for, and is not to be made available to, persons in the United States (being persons resident in the US, corporations, partnerships or other entities created or organized in or under the laws of the US or any person falling within the definition of the term "US Person" under the US Securities Act of 1933, as amended), wherever located. Any information regarding securities offerings, or references to securities offerings, that are contained on these pages do not constitute or form part of any offer of securities for sale or the solicitation of an offer to purchase securities in the United States or in any other jurisdiction where such offer may be restricted. In no event shall DSP Mutual Fund and / or its affiliates or any of their directors, officers and employees be liable for any special direct, indirect, special, incidental or consequential damages arising out of the use of information / opinion herein.
The site, texts, images, designs, pictures, sounds, photographs, animation, and videos together with their layout and more generally all the items contained on this website are the sole property of DSP Asset Managers Pvt. Ltd. This site and all of the elements on this site are protected by Indian Law and by International copyright agreements concerning intellectual property. The content of this website must not be copied, modified, reproduced, distributed, transferred, edited or made accessible to third parties for any purposes whatsoever without obtaining prior permission from the owners of this website.
@ copyright DSPAM All rights reserved.
Need Help? Check most used links
We got your contact details. DSP team will get back to you soon.VIEW OUR Bestsellers
To help you our services, we would be grateful if yo could tell us why:
The email address [email protected] has been removed from our mailing list. you will no longer hear from us.
Did you unsubscribe by accident?