"5 Reasons & 10 wisdom nuggets" Although I have no entitlement to share content on personal finance, I have 5 compelling reasons to share my learnings with you. 1. April marks the start of fiscal year in India, making it an opportune time for investment declarations 2. Since the implementation of new tax regime, many in earning class have ceased investing, mistakenly viewing it solely as a tax-saving exercise & thereby overlooking its potential for long-term wealth building 3. Additionally, personal finance is not formally taught in the Indian educational curriculum, despite its significance for achieving financial freedom. 4. Emphasising the enduring nature of wisdom and fundamentals is always beneficial 5. While general inflation numbers hover around 5-6%, they fail to adequately address the steep costs of corporate hospital fees, school fees and real estate in Tier 1 cities Top 10 fundamentals that every salaried class in India should understand 1. Asset Classes: Understanding different asset classes like debt, gold, real estate, and equity is key to growing your wealth 2. Diversification: Do not put all your eggs in the same basket. Different goals such as buying a house, children's education, marriage, retirement, or a vacation require different investment vehicles 3. Classification: Income (such as salary, rent, dividends) needs to be classified into investment (growth), purchase (depreciation), and expense 4. Purchasing Power: Understand inflation and invest in asset classes that outpace inflation 5. Rule of 72: Estimate how long an investment will take to double at a certain interest rate by dividing 72 by the interest rate (as a percentage). For Example: at 8% interest, it would take about 9 years (72 / 8) to double your money 6. Retirement: It's never too early or too late for retirement planning. Pension investments rose from 81K Crore in FY-15 to 10 Lakh Crore in FY-24, indicating a growth of 28.4% per annum. 7. Emergency: Always maintain 6-12 months' worth of emergency funds. Wars, recessions, and recent pandemics have pushed many borderline middle-class individuals into poverty 8. Habits: The paradox of wealth-building is that while it's a field of logic & numbers, the decisions that drive growth are often emotional. Poor habits lead to poor results 9. Risk Appetite: Each individual may have a different risk appetite, ranging from conservative to moderate to high. Choose financial instruments based on risk appetite and avoid falling for TV adds promoting the next "multi-bagger". 10. Insurance: Have adequate coverage of term life insurance. Avoid falling into the trap of money-back policies, which benefit insurance agents and companies more than individuals Finally, India’s ambition to become the 3rd largest economy in the next 3-5 years is not just dependent on the government but also on each citizen increasing their per capita income. Key Links in Comments section. #PersonalFinance #Investment #FinancialWisdom #IndianEconomy
World Bank Inflation Data: https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?locations=IN
GDP Growth of India in the last 3+ decades - https://www.statista.com/statistics/263771/gross-domestic-product-gdp-in-india/
Albeit most of the points are known, but that's a good post and need of the hour ! Indeed sharing this !
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7moBest Video on understanding NPS - https://www.etmoney.com/learn/nps/best-nps-fund-managers-which-nps-fund-should-you-invest-in/