The Most Authentic Guide on Personal Finance and Investments

(Funny) Words of Wisdom : "My wallet is like an onion, opening it makes me cry." ~ Anonymous

5 financial tips for a young, dynamic and savvy professional

One.  Pay off all your credit card bills at the earliest. Thereafter, make doubly sure to spend only to the extent that you can pay the entire bill by the due date. In short, do NOT carry forward any outstanding balance. In case you are not aware, you have to pay anything between 30-50% as interest charges on your unpaid amounts. It is nothing but financial hara-kiri to pay such exorbitant charges.

Two.  Every month, month after month and without fail, invest 10% of your take home pay in a few top-rated mutual funds — and keep the money there for a minimum 5-7 years. Do not bother about the markets or the Sensex. In fact, you should be happy when the markets crash. Because that will ultimately give you the best profits.

Three.  Avoid insurance policies, whether traditional ones or the ULIPs, as they are inefficient investments vis-à-vis PPF, mutual funds etc. They entail huge costs, which go into the pockets of the insurance company and the agents [which is why they can afford to spend crores on advertisements.] Anyway, when you have no liabilities, you don’t need insurance.

Four.  Avoid personal loans. For car, home or education loans, compare the EMI/lakh payable instead of comparing interest rates. Creative strategies are used by banks to make their interest rate appear lower than their competitors. However, ultimately what you have to shell out every month may turn out to be higher.

Five.  Keep things simple. Simplest of the products (simple mutual fund, simple mediclaim policy, simple PF/PPF etc.) will give the maximum benefit. Look what happened to the mighty US when it dabbled in complicated products and collapsed.

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