Timeless Financial Principles

If you wish to reach the highest, begin at the lowest.

Aspects of financial planning

Timeless Financial Principles.

1.       Don't work for money. Focus on making money work for you.

2.     Never say 'I can't afford it, instead say 'how can I afford it?'

3.     Never buy things on credit. If you can't pay cash for it then you can't afford it.

4.     Focus on investing rather than saving.

5.     Pay yourself first, 10% of everything you earn is yours to keep.

6.     Know the difference between good and bad debt. Good debt puts money in your pocket, bad debt takes money out of your pocket.

7.     An asset puts money in your pocket. A liability takes money out of your pocket. Spend your money buying assets.

8.     Turn your working/active income into passive income. Passive income is income that is generated from assets you own.

9.     Focus on improving your financial literacy. 9 times out of 10 financial literacy is self-taught. It is not taught in school.

10.  Always keep an emergency fund, this should be at least 5% of your income.

When you do these things, you'll have more than enough to buy all the thing so you want.

Various investment types in India

In India, I can think of below options: -

1.      EPF (Employee Provident Fund)

2.    PPF (Public Provident Fund)

3.    Post Office Saving Schemes

4.    Fixed Deposits

5.    Recurring Deposits

6.    ELSS (Equity Linked Saving Schemes)

7.   Share Markets

8. Mutual Funds

9.  Commodities Exchanges

10.RGESS (for individuals with income up to 10Lakhs only)

11.   ULIP's

12. LIC Policies

13. National Pension Scheme (NPS)

14. Gold ETF's

15. Silver ETF’s

16. Physical Gold/Silver

17. Real Estate

18.Kisan Vikas Patra (KVP)

19. Bonds/Debenture

20.Derivatives (Futures/Options)

21. Currency Markets

22. Last but not the least invest in yourself, i.e., keep reading, keep asking, keep questioning, keep learning and keep growing :-)

Educate yourself, handle basics first

Before making your first investment in stocks, take the time to learn the basics about the stock market and the individual securities composing the market. There is an old adage: It is not a stock market, but a market of stocks. Your focus will be upon individual securities which you are investing in and the relationship with the broader economy and the factors that drive your stock. Some important areas which you should be familiar with before entering the market are:

# Understanding financial metrics and definitions such as PE, EPS, ROE, Market Cap and so on

# Popular Methods of Stock Selection and Timing, such as fundamental and technical analyses

# Trading basics, rules, compliances and terminology as market order types including market orders, limit order, stop market orders, stop limit orders, trailing stop loss orders, and other types commonly used by investors, margin money required if you want to trade in F&O.

# Gain some understanding about the market and its relationship with the economy such as market relationship with inflation, GDP, fiscal deficit, crude prices, rupees values against dollar. People lose money in the markets because they simple jump to the market without understanding the economic and investment market cycles.