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Basic investment and financial planning
This document provides guidance on basic investment and financial planning. It emphasizes the importance of budgeting expenses religiously for 3 months to understand monthly needs and amounts that can be saved. It recommends tracking expenses using budgeting apps and suggests saving bonuses and windfalls instead of spending them. The document advises against saving only for future purchases and warns against savings accounts with no interest. Finally, it outlines different investment vehicles like fixed deposits, treasury bills, money market funds, equity funds, real estate, and alternatives, noting their risks.
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Basic investment and financial planning
- 1. Basic Investment andFinancial Planning
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- 3. Budget, budget, budget Habit> Accuracy I got my major personal finance breakthrough from monitoring my expenses religiously for 3 months. It gave me a good estimate of what I need to spend monthly and what to save/invest.
- 4. How To TrackYour Expenses https://drive.google.com/file/d/1413oVdQAtZQSQBgwaj_-rdN4nLUm8dBN/view
- 5. How To TrackYour Expenses http://wally.me/ You should check out the many budgeting and expense tracker apps on Apple App store and Google Play store
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- 7. N1 (income) –0.99k (expense) = ? It can be very difficult to spend less than you earn. The trick is to reduce your spendable earning. Pay yourself first!
- 8. Save All Bonuses& Windfall Don’t celebrate bonuses and windfalls with new expenses but with new savings
- 9. Wrong Type ofSaving
- 10. Saving only toSpend Don’t use vacation or car purchase or some fancy future spending as your motivation to save.
- 11. Saving In Non-InterestAccounts Don’t do monthly contributions that yield no return on savings. Don’t put your savings in a bank savings account. Your money should grow over time.
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- 13. Different Investment Vehicles BankFixed Deposit You negotiate a higher rate than usual savings account interest rate but comes with withdrawal restrictions Treasury Bills You can buy through secondary market (bank, finance houses). Rate is often better than fixed deposit. Money Market Funds They put your money into treasury bills, commercial papers and other liquid short term instruments. Equities Funds They put your money into equities/stocks. Comes with higher risks than the previously stated ones. Real Estate You buy/lease land or building/house purely for commercial purposes. Can be very risky as market is not structured. Alts Cryptocurrency, crowdfunding, fx trading and many others that are not in the earlier categories. Very very risky.
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