04/04/2021
Recently I was watching a video on personal finance management by famous author "Monika Helen". She is also author of book "Lets talk money" which is famous book on personal finance management in indian context. Really interesting thgoughts she puts across about the Personal finance mangement.
Key highlights and take away are as below but not limited to keeping personal finance management :
1. Managing 3 separate bank accounts for your needs. One for spending, 2nd one for Saving and third one for investing. If you have 3 different accounts at the end of year , it would be easy to track where spends, savings & investments are going in !!!
2. Don't mix investment with ULIP- There are lot of schemes which mixes insurance with investment which doesn't give clarity on investment and will try to mix insurance with invesment. try to avoid these schemes. Buy term insurance if looking for insurance.
3. Give equity exposure for your money - As we all comes from indian mentality and traditional background, our parents have thought and given us very good education, however our literacy on finance is very poor. When we say investment we always talk about either Real estate, FD, RD which are very difficult to invest in and invest out or gives very poor interest rates.
An average aged person let us say 35, should expose (100-35 = 65%) of exposure to equity, which helps grow your money way ahead of traditional based investment strategies.
4. No one knows 100% about market : If you want to invest in market - basics are good enough. Best way is give exposure in terms of Index funds or Mutual funds where your effort is very minmal and money is componded as market moves up the ladder.
5. Goal based investment- If you are specifically targetting specific goals like children education, marriage or home, start early and put specific amount in start of month in assets to meet those well ahead of time each month.
6. Asset allocation in your portfolio should be balanced and less risk free in spite of market fluctuations or global changes , your invested money should continue to grow with minimal risk and continue to at CAGR as expected.
Hope above few points will make your investment decision and brings more clarity. Please feel free to write to me if you need suggestions or commenst.
