Money the elixir of life can be earned, saved, grown by proper careful planning. As with every process in life financial freedom goal setting is an art that needs to be carefully designed rather than science that has some rules.
Here are some simple financial planning tips you can adopt in your day-to-day life
1) Treat Money as Money - Every investmetn demands a good return. Say, when I started this website few years back, our initial intention was that this is a hobby. Eventually it has progressed to level of business offering interesting opportunity for our visitors to post their advertisments and get reliable leads. Now, this is a business with proper brand. If we would have thought of this as hobby it would have had its limit. Now, this brings in return on ivnestment and this is a busienss. Anyone really enjoys the true benefit of hardwork when they see the return on investment. The investment can be time, money, hardwork to name a few. So, always treat money as money. Never, try to bring in emotion into money. Wrong emotions will make you lose interesting options in life. This should be the first goal towards achieving financial freedom
2) Do I know this product? - As a newbie as well as seasoned investor all of us are stuck with this simple question. One simple example is one of our friends had some fixed deposits in a bank. When we met the bank manager for a different purpose he was asked to switch from fixed deposit to mutual funds. The mnager mentioned that yield in fixed deposit can be maximum 7.% post taxes. In mutual funds around 12% yield is possible. Our friend chose to brak FD's and invested in mutual fund. This happened in 2008. IF it would ahve been 2011 this is the wisest decision. However, 2008 had great recession hitting global economy. The maanger can earn some commission as they act as agent on selling such instruments. So, for financial planning you should know what you are doing. Wihtout even reading the document if you invest you may or may not make money. The pain of losing hard earned money cannot be explained in words. So, understand the financial instruments if you ever want to invest in that
3) Discipline is Money - Once you determine to invest in a financial instrument maintian very good discipline about managing that investment. If this is a fixed deposit pay taxes properly, in case of mutual fund monitor NAV (Net Asset Value) daily, stocks then look at trend daily, LIC pay premium annually, gold keep it safe in bank locker ever since purchase and monitor the gold in locker once in a while.It is your hard earned money and be disciplined about it
4) Do complete math to get exact return - Say fixed deposit yield is 9% per annum, 9.25% on quarterly compunding basis, will be closer to 7.25% after tax deducation. So, set aside the tax amount when you calculate net return on investment
5) Saving money is earning money - This starts with monitoring and paying bills on time, paying credit cards properly without fail, paying loan liabilities regularly to name a few
As such this is an art that comes with practice and not science
Here are some simple financial planning tips you can adopt in your day-to-day life
1) Treat Money as Money - Every investmetn demands a good return. Say, when I started this website few years back, our initial intention was that this is a hobby. Eventually it has progressed to level of business offering interesting opportunity for our visitors to post their advertisments and get reliable leads. Now, this is a business with proper brand. If we would have thought of this as hobby it would have had its limit. Now, this brings in return on ivnestment and this is a busienss. Anyone really enjoys the true benefit of hardwork when they see the return on investment. The investment can be time, money, hardwork to name a few. So, always treat money as money. Never, try to bring in emotion into money. Wrong emotions will make you lose interesting options in life. This should be the first goal towards achieving financial freedom
2) Do I know this product? - As a newbie as well as seasoned investor all of us are stuck with this simple question. One simple example is one of our friends had some fixed deposits in a bank. When we met the bank manager for a different purpose he was asked to switch from fixed deposit to mutual funds. The mnager mentioned that yield in fixed deposit can be maximum 7.% post taxes. In mutual funds around 12% yield is possible. Our friend chose to brak FD's and invested in mutual fund. This happened in 2008. IF it would ahve been 2011 this is the wisest decision. However, 2008 had great recession hitting global economy. The maanger can earn some commission as they act as agent on selling such instruments. So, for financial planning you should know what you are doing. Wihtout even reading the document if you invest you may or may not make money. The pain of losing hard earned money cannot be explained in words. So, understand the financial instruments if you ever want to invest in that
3) Discipline is Money - Once you determine to invest in a financial instrument maintian very good discipline about managing that investment. If this is a fixed deposit pay taxes properly, in case of mutual fund monitor NAV (Net Asset Value) daily, stocks then look at trend daily, LIC pay premium annually, gold keep it safe in bank locker ever since purchase and monitor the gold in locker once in a while.It is your hard earned money and be disciplined about it
4) Do complete math to get exact return - Say fixed deposit yield is 9% per annum, 9.25% on quarterly compunding basis, will be closer to 7.25% after tax deducation. So, set aside the tax amount when you calculate net return on investment
5) Saving money is earning money - This starts with monitoring and paying bills on time, paying credit cards properly without fail, paying loan liabilities regularly to name a few
As such this is an art that comes with practice and not science
