Learn the Art of Managing Personal Finance: How to be effective in Personal Finance | Prakash Prasad | Skillshare

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Learn the Art of Managing Personal Finance: How to be effective in Personal Finance

teacher avatar Prakash Prasad, Simplifying stuff for betterment

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Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

12 Lessons (3h 35m)
    • 1. Glimpse of the Course

      1:13
    • 2. Section 1: Smart Goals, Net Worth, House Hold Budget & Cash Flow Analysis

      30:55
    • 3. Section 2: Rules of Personal Finance - The Easy Maths of Personal Finance

      9:54
    • 4. Section 3: Behavioral Finance

      11:19
    • 5. Section 4: Risk Profiling & Asset Allocation

      11:08
    • 6. Section 5: Foundations of Investments & Investment Products

      88:09
    • 7. Section 6: Financial Planner & Robo advisory

      4:52
    • 8. Section 7: Specific Goal Planning & Time Value

      23:21
    • 9. Section 8: Credit Loan Facilities

      17:53
    • 10. Section 9: Learn to be a Rock Star Expense Planner

      4:29
    • 11. Section 10 Cash Course on Credit Rating, Credit Score & Credit Report

      7:32
    • 12. Section 11: Ten Pro Tips & Apps/Tools

      4:37
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About This Class

This course is a Easy, Practical and complete guide to gain solid foundation on personal finances....

Learning the basics of personal finance from savings to budgeting and all in between will help you create a better future and minimize some of the risksVery few courses or books are available online on personal finance..Most of them are either too complicated to understand or lack practical application in real life.  You will also find worksheets on budgeting or tips about how to build savings on a dime. For more comprehensive wealth-building, such as retirement savings or other long-term goals, you may need a practical hands-on training. This course exactly does that.. If you have economic stress, if you want to know more about your personal finances, if you want a method to be followed to achieve your financial freedom... This course is for YOU!

This course equip you the right set of tools and techniques to be wise with your personal finance.

What you'll learn (comprehensive outline):

Section-I

Personal Finance Concepts

  1. Setting GOAL & GOAL Basis the Timeline: Short Term, Mid Term, Long Term
  2. Illustration of SMART GOAL
  3. Vivid Life Cycle & Life Stages
  4. Understand your Net Worth – Exercise
  5. How Positive and Negative Impacts you
  6. Calculate & Plan Expenses – Exercise
  7. Design your own House Hold Budget
  8. Is the credit card interest worth paying?
  9. Why do I spend more than expected?
  10. 20% Club
  11. Cash Flow Planning
  12. Cash Flow Planning – Exercise
  13. Rule of 6
  14. Decide which Bank is the Best 
  15. What happens, when the bank FAILS?

Section-II

 Rules of Personal Finance - The Easy Maths of Personal Finance.

  1. Rule of Double
  2. Rule of Triple 
  3. Rule of Quadruple
  4. Rule of Eight Times 
  5. Rule of 69
  6. Rule of 15

Section-III

 Behavioral Finance & Investing

  1. 2 Key Rules
  2. Why it is different for different people?
  3. What influences their behavior?
  4. Information Overload
  5. Overconfidence  
  6. Anchoring
  7. Loss Aversion
  8. Familiarity Bias
  9. Herding
  10. 9 Ticks of Behavioral Finance & Investing 

Section-IV

Risk Profiling & Asset Allocation

  1. Risk Profile Basis Age
  2. Risk Profile Basis Risk Profile
  3. Asset allocation
  4. Risk Return Trade off
  5. Risk Tolerance Matrix

Section-V

Foundations of Investments & Investment Products

Key Concepts of Investing:

  1. Investment / Saving
  2. Interest
  3. Annual Percentage Rate (APR)
  4. Returns
  5. Inflation
  6. Risk
  7. Power of Compounding - The Super Power of Multiplier 
  8. Risk
  9. TEAR & PAT - The RISK
  • Stock / Equity / IPO
  • Mutual Funds
  • Precious Metals Investing : Gold, Silver & Precious Metals
  • Fixed Instruments
  • Bonds
  • ETF - Exchange Traded Funds
  • Small Saving Schemes
  • Insurance: Life and General Insurance
  • Derivative
  • Alternate Investments: Private Equity, Start-Ups, Cryptocurrency etc

Equity/Stocks and IPO - Initial Public Offer

  1. How to Identify Right Stocks?
  2. What do you need to Invest in Stocks?
  3. Why to Invest?
  4. How to Invest in Stocks: Price to Earning Ratio – P/E RatioDebt to Equity Ratio, Price to Book Value, Return on Equity – ROECurrent Ratio

Mutual Fund

  1. Key concepts: Units, Nav, Loads etc.
  2. 14 Types of Mutual Fund
  3. Options in Mutual Fund: SIP, SWP, STP...
  4. 12 Benefits of SIP Investing- Systematic Investment Plan
  5. 6 Things to avoid while investing in SIP

Real Estate investing

  1. Benefits of investing in Real Estate
  2. 4 cost associated with Real Estate
  3. 7 Variety of Real Estate
  4. 13 costly mistakes to avoid - investing in real estate

Gold / Silver or Precious Metal Investing

  1. 5 Easy ways to invest
  2. Risk associated with Investing in Precious Metal

 Fixed Investments, Bonds & ETFs

  1. Certificate of Deposit / Fixed Deposits Benefits

Bond :

  1. Various Basket of Bond : Government Bond, Corporate Bond, Municipal Bond, Zero Coupon Bond, Junk Bond
  2. Key Concepts: Par Value, Face Value, Coupon etc
  3. 5 Risk of Investing in Bonds
  4. Benefits of Investing in ETFs
  5. Risk of Investing in ETFs
  6. Small Savings Schemes: PPF, National Savings Scheme, Schemes for Senior Citizen

Cryptocurrency Investing

  1. How to Invest?
  2. What are the type of Cryptocurrency Investing?
  3. 12 Key Points to remember while investing into Cryptocurrency

 Insurance, Derivative & Private Equity

  1. Life Insurance
  2. General Insurance
  3. Complex Concepts Simplified - Derivative
  4. Types of Derivative
  5. Overview of Private Equity / Start-ups
  6. Common types of Private Equity
  7. How to Invest into Private Equity? 

Section-VI

 Financial Planner & Robo-advisory

  1. Do you need Financial Planner?
  2. A Slice of Robo-Advisory
  3. Top Robo-Advisory

 

Section-VII

  1. Specific Goal Planning & Time Value
  2. Education, Dream Car, Dream Home, Savings for Retirement etc.
  3. Time Value : PV, FV, Annuity, Annuity Due
  4. Practical Exercises

 

Section-VIII

 Credit Facilities

  1. Home / Mortgage Loan
  2. Car Loan
  3. Personal Loan
  4. Education Loan / Study Loan
  5. Credit Card
  6. Is it worth to buy a property or rent it?
  7. Rule of 30%
  8. Rule of 2%
  9. Credit cards – Deadly Mistakes
  10. 10 Ways NOT to be a Credit cards Defaulter
  11. Is it wise to take Personal Loan or Home Loan / Mortgage Loan?
  12. Is it wise to buy a Brand New Car?

Section-IX

Learn to be a Rock Star Expense Planner:

  1.  15 To Stop Sending On
  2. 122 Easy Ways to be a Rock Star Expense Planner - Exercise

Section-X

 Credit Rating, Credit Score & Credit Report

  1. Overview
  2. What is Credit Score Range?
  3. Credit Bureau
  4. Importance of Credit Score
  5. How to get Credit Score/ Report - Legally
  6. 7 Ways to Repair your Credit history
  7. Control Credit

Section-XI

  1. 10 Pro Tips to Memorize
  2. Financial Apps (Software tools) for Android & iOS

 

 

Disclaimer: The information provided in this course should not be used as financial advise or recommendation, neither it should be viewed as a financial promotional or affiliation tool or advertisement nor it supports or endorse any tools or company illustrated throughout the course, should not be substituted for consulting a financial advisor, planner or allied professional in the applicable jurisdictions. This course outline the broad road map to manage your personal finance. The author or Skillshare disclaim the liability or any damage, risk, loss or obligations incurred directly or indirectly. The situation is dynamic and can change anytime due to various factors. The  author is directly or indirectly or otherwise is not under obligation, risk or liability due to use of information given in this course.

Meet Your Teacher

Teacher Profile Image

Prakash Prasad

Simplifying stuff for betterment

Teacher

Author is a member of the Cyber Crime Investigation Faculty, Cyber Forensic Analyst, Business Coach, Investment Banker and a Researcher. He has authored four plus books on Cyber Law, Digital Currency, Bitcoin, Blockchain and Cyber Crime Awareness. He contributes to Magazines of International Repute. 

In the last 2 decades, He has trained thousands of participants working in various sectors about Financial Markets and Products, Economics, Statistics, Data Science, Programming, Design Thinking, Public Administration, Life Skills, Law, Psychology, Banking Fundamentals, Advance Banking concepts, Foreign Exchange, International Banking, Risk Management, Compliance, Fraud Analysis, Cyber Security, Digital Forensics, FinTech, Innovative Technology(Blockchain, Cryptocurren... See full profile

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Transcripts

1. Glimpse of the Course : Hi, I'm precaution. I'm a 35 plan a coach and have worked on manage personal finance for Made Tonight I will treasure Nightline's working at various levels in both private and public sector, including Fortune 500 companies on Marius. Business owners, professionals, freelances as well in this class will look into an interesting concept on practical hands on to personal finance. Looking to the march behind the investment anchored facility on also how our behavior prices on perception influences personal finance on much more. No school teaches you to manage your personal finance. I'm here to help you to be effective in managing your personal finance in the easiest and simple way. It doesn't matter very a working what you're doing. There is something you can learn if you're very bad or very good, big or small, there is something you can learn to make yourself better. You need to have a laptop PC with the Microsoft Excel in Stroll 2007 and a bow was Eunice preferred. Watch the video on work on the project. Along with me. You have any questions? I'll be happy to help see you in the club 2. Section 1: Smart Goals, Net Worth, House Hold Budget & Cash Flow Analysis: someone has rightly said, If you don't know where you are going not someone Lawrence Peter He rightly said that if you don't know where you're going, you'll probably end somewhere else. That's what we often do. Correct. We have to go somewhere and we go somewhere. But we can't mess with a personal finance. Peter is too short to mess up the personal finance. You will have to go somebody else to take money. Someone else will enjoy human. No, let me ask you how much you have. I'm not coming to steal your money just for your knowledge. How much do you have? Do you have an idea or an estimate? I think most off you would say Yea, probably more than 70% off. You will say no, I don't know. How much time do you have? I have a lot of time in life. I will plan. I will do my things, asked for my passport demand. So my time is waiting for me. It's like a Ferrari waiting downstairs for me or are even wait for me. Time doesn't wait for anyone. So how much time do you have technique to be taken into account What is your goal? You have a short tongue goal. Maybe six months When you do. You How do you have a mid term goals like, um, atomic them or your victims? And Mr Or it could be anything. Anything ranging from three years to five years. Islamic term. Good. Now what is? This long toe long term goal is extremely long. Anything beyond 10 years is considered as long term goals. Your long term goes into four important decisions off life child's education, marriage, buying your personal property or mortgage mind Fancy drinker and planning for your diamond . Yeah. We have to plan for our determine who said we have to plan for our determine I have sufficient money. We'll see how it works on what would happen if you lock up your money in the local just Bill. It is smart how you need to be neutral. Smart. You need to set of smart girls Now what is this? Margo's s a simple and specific. You need to have a simple in a specific goal that I have to do. This means I have to do this. My goal should be measurable. A number to it as well as there should be an achievable goal. For example, if I think that I should have $10 trillion in two years, that is something unbelievable. That is unrealistic goal. We have to set up a realistic goal. It should have a time limit. It should have a time ball. Not within so many years. I need to achieve this school that just call smart. Cool. Are you smart enough to set a smart cool? Let's look at this, Alexander says, to send his or her child stand for 10 years from now. The education would cost approximately one black $20,000. At that time. She saves about $1000. For months. He's Alexis Smart. The question is to you tell me if she's smart, you know, to make smart girls. I will wait for a while for your answer. Time's up. I told you Alexa would be smart enough to set of smart Cool how she had set up a cool off, achieving one like $20,000. Was it measured, or is it measurable? Yes, it was measured that $1000 in 10 years amounts to 19 $20,000. Is it a table Yes, it is a terrible Is it realistic? Yes. We have set up a realistic goal. Is a time bomb? Yes. It has a time burned off and use ends. Alex I smart. So is most of the woman. I'm not generalizing. I'm not biased towards anybody. Don't take it out of the way. Let's move. I welcome back. Someone has rightly said the best investment that could get for yourself is investment in your financial education. I repeat, the best investment that you could get for yourself is the investment on your financial education. Before we get into understanding off life stages, we live for important financial gurus boozer and math Red L What is this? And I m stands for market that is buying a home. F stands for pruning. That is the last speech off your life when you are no longer there. R stands for replaced income. That means something happens to you. What is an alternate source? Off income. He stands for education. These stands for dead else times for legacy. But you're leaving behind that is what you bow on. You have taken it from somebody inform off money. Now let us understand. Various life. See which opossum goes. This is the mandatory life states which everyone off us willpower were initially single. Very happy life, right then. Then we get married not of responsibilities kids joining additional responsibility off, educating them, rooming them, sending them for higher education. That's okay, that's apart off like right. But this all cost you a bomb. There is a huge sum off money. Then comes your peak stage, where in your beak, off income as well. It's expended. Then it's like a bell curve. Then it starts declining, wherein you have to conserve will save more towards your diamond. But that time the expenses multi fools the curves looks something like this, like a belco is initially goes, goes rules wherein you on as well a spend more. Then your income starts declining on your appendages also needs to be managed and balanced well. For all of this, what is important is planning if you don't plan, will not be ableto Cooper with this leader's life stage. We want to live a stress free life, correct. So we have to plan for this. I'm your guide. You don't worry before the peak, we can call it as an accumulation state or of wealth accumulation. ST. Mary, we have more words are protection rest? We have toe give more towards the protecting arrest cover. Then we have transit dreams like buying a ho my angle. Luxurious car going on an international trip, educating our Children, buying a large commercial or residential property of grading our vehicle. Then the consumption and distribution says that after 60 because they're the source of income is limited, but the expenditure increases. Then you have to plan for the legacy. What legacy is something that you leave behind? So it's like a cycle or spiral very new own, you see, and you invest. What I would suggest is whatever income you get was see land for the expenditure on investor. That is the right way to go about network. Your network to the world is usually deter mined by what remains after your bad habits are subtracted from your good ones. Life is glass, even to us. To fill a busy life is filling it with as much as it can hold. Ah, hard life had more poured into it that it can contain. It is up to you to choose the first court was from the famous investment group Benjamin Franklin. Let me repeat that quote again. Your network to the world is usually deter mined by what remains after your bad habit. Miners from your good ones. But this let's move ahead. You would have the question in your mind. Is it safe for me to Bildman it with a Newman? It was, Yes, off course. Let's open the net. Put exercise on. Let's complete the exercise to know a network, please open the exercise file. This is a network calculator on the left. Inside, you have to list all your asset. All you need to do is just change the numbers. This is an estimated one on this is an action figure that is fine. You have to just give a number estimated means for to have estimated enough ball, Paktika or calculation on actual what? Actually, you end up spending or end up running to that. You have to write you to give you a simple example. For example, in case of income, the estimated income would be X among was even like 10,000. But actually you get about $80 so you have to put in 80,000 where you labour's Once you complete and die seat, you can add or subtract column. As for your requirement, but leave the column. It you're not using their put in zero. Once you come towards the right inside acid, what do you feel up on your left inside? Waas? What do you have now? Your liabilities will be what you owe. Or do you go to somebody else that you will Addo you. All you need to do is put in the number a rent estimated time could be, say, 30,000 on your actual would also be similar, like 30,000. It might be four, depending on the current situation or current month. He's also will be fit so you can put in the fees alone. Or, if it differs, you can put in the deferred a mold, then any loan or mortgage which you're paying all details would come here, including your personal loan education loan car loan, although utility payments would come here because this is on landed three payments. This is a good topic of discussion, but it should be included or it shouldn't be included. But let's for a calculation sake. Let's included in our livelihoods because that is something that you have to be. Did you have to send out of your pocket, tending the Internet and cable expenses and other utilities? The GOP Just leave the highlighter cells as it is. Whatever you can see, just don't put in any values over there. Okay, put in their income tax or property tax multiple times. So well, that's the Q B. Is there any Allouni or give tax, which you have paid? The credit card is You can put in your suppose you estimated to be this much, but actually comes out to be this much. So there is a difference amount off 59,000 dollars. Once you scroll below, you will see that there's a calculation which is already done. This was the estimated one, and this is the actual figure. So this will give you your total acid that what do you have actually on this will give you what you actually do that what you have to pay. Now the question is, how do you come to the network? So network would be their total asset that is your right inside total actual total subtracted by the total liabilities. That is the actual liabilities, not the estimated one. See you. This is an actual one. This alleged on this is an actual expenses. This is an actual I said. Did you have that's little minds, your network. Now the question would be Is it good to have a positive network? Obviously, the more positive network do you have there would be less likely were off. You borrowing money so you can plan your finances well. The negative network means you are spending more than what you're earning. That is a red flag. Keep in mind, I know that we saw how on it would is calculated. The formula just is not a mathematical thing. Does this Bloomfield now? Will that now the Manchester? No, no, it's not. Not mathematical. It's very simple. Network is basically your total asset means what you have minus total liability. What you have to give up what you owe. Good. Isn't that great? We also discussed about positive and negative network. Positive Net foot is always good. Burying what you have is more than what you what. You have to give it to somebody. A negative net book is a bicycle soffit, your you have more of expenditure than you income, so it's always better to have a positive network rather than having a negative network. Mostly, our expenses are covered in three major categories known as N D A, and stands for need or necessity these times for dreams or goals. Hey, stands for aspiration. Now let us look at each of them. What is need or necessity? I am a dire need. Often help plan, tongue plan, life insurance plan, daily living expenses and emergency funds. Why is that required? Because in order to sustain in order to leave a rapport recent life you need to cover this basic necessity like air is a basic necessity for us to leave. This are some of the necessary expenses which you cannot avoid. What a dream dreams or goals like buying a bigger house. Having a bigger car going for a vacation goes, some goes sir. A never table does are very important and crucial, like getting a proper education. Educating your child, getting married, Having no dead is not possible, right? Having no that yeah, it's not possible because we tend to have our expenditure more than our income. I'll teach you in the schools how to manage that? Start your own business. That also would be one of our dreams or goals. Know what is aspirations? Aspirations grows bigger, bigger and bigger as the time passes, you want to have access to premium facilities like Gold Club, our finest dining experience on to have a farm house, a bigger bungalow you want to generate well, But how you need to first understand, what is my network today on where I want Toby, you sustain this life having about the lifestyle. Now you will say, Excuse me, I have a lot of expenses. I don't know where my money disappears. It just comes in and flows out. I'm out of funds. Most of the time. I'm always spending. I don't know what to do. I don't have anybody to assist me or an expert. I cannot afford a financial planner for everything. We have this in the schools. It will give you a point. A point detail. How to manage your personal finance will on achieve your dream. Whatever you have went off, no lettuce get her hands dirty. We already did. One exercise at eight. There's around for one more exist size. Honestly, please fill it up. Are you ready? Let's get started. Pause this video open the excessive which has the title expense. She which is that? Dads exercise on the resources section. No, it's honestly fill this up. You will enter the date. See? I haven't heard for January 2020. I will end of the merchant name if you know, put in Starbucks or whatever you want whenever you want. Wherever you will spend the money now then do that moan. I will enter as Mylan Entertainment. I can select what I can type in whatever I want. If there is any special or photo meeting or something I can put in here. Likewise, You can fill up the inter ship. Yes, closed down because we have it for lit up. We can categorize it. Aspar dream basic categories So we can understand. What do you think you can do is we can de select you Drop this and understand where my major spending your screen where my major expenses are going made on my media. Out go so you can see and spending a boat close to $61 on meals and entertainment. They don't travel on spending about $667 which is quite huge Then on utilities, I'm spending a boat 50 even, are not close to $51. So against electoral by clicking here, the HKMA are you need to do is click here, then select all and click Ok, you come back to the original see from the expensive calculator we already understood on categorized our expenses No, I know my expensive right What do you suggest next? Please take a break cause this video and come back before we start household budget You please take a break for a while. That was a lot of mathematical concepts, right? No, no, it's not mats. It's more off for fun. Don't get stairs. That's a simple excel. I promise you you would enjoy it on it would be voted to a stained welcome back. Now you would ask How is this household budget different from my expense sheet? Expensive Also constitute some portion off your household budget. But first, before we understand what is and household budget letters understand what exactly this is it house hold expenses That is the monthly expenses. How do we know? Let's Let's fight A magical wound are brokered opera on the household budget expense. Shit. Look open. Here we go. Our household budget shoots pops up. No letters. Enter the figures, The numbers. We precise what we spend so we can pull this out from our expensive, which we prepared. Just enter, say, $50 which I spend on the coffee. We don't need to enter in dissembled or anything. Just into the numbers. It doesn't matter if it is dollar symbol or it is a rupee. Symbology is a yen symbol. A. It's a pound symbol. Just entered the number. You have a rough estimate on an island on my traveling expenses. About 667. I don't recall it totally, but yeah, it was something you do that I'll put in expenses on travel. Okay, then house being expenses, maybe on mortgage rent here. You don't want anything. You know, during the all the deals were you and expenses on transportation, The traveling expenses and the transportation are two different things. Traveling expenses is work. I pay by, like travel, using public transport. Your transportation means my own facility, like our land except, uh, on repair and maintain ins all fueling the car, feeding the car, feeding the hungry co. My one not all expenses would come into this transportation. We're in their maintenance. You can fill in all the editors than all the expenses on food, like groceries, restaurant your party alone and did amount over you, then expenses on pet foods. Yes. That also needs to be considered in all your utilities entered the electricity bill. Water bill. You You will have a total expenditure. That is your household budget. This is a budget sheet you came to know. What are you? Expenses. Now all you need to do with open up your net. Worth Street we saw in a previous lecture. Now this is the total expenditure bit. We came to know this is the total household expenditure. Now, how do we constitute a budget budget Would be our expenditure. You have to have a proper budget to plan our explain show. So this is their budget Cheap. His shoes. How much is the expenditure between? Have if we need to maintain on a monthly basis all that No. We have a proper idea off a network expenditure on a budget that this household budget that is how much I have to spend on a monthly basis. Some of the expenses, non mandatory expenses you can cartel or stop or reduce or tried to reduce on some important expenses. Lex Let the necessity that you need to survive. You need to continue, does expenditure and try if you try and see if you can reduce it. For example, spending unnecessary on a cable is not required in this Internet age. You can watch now, Lord read whatever you want, you can do. Using the Internet. You don't need an additional expenditure to spend on cable. Likewise, there are many of the expenditure of it you can control, so try doing your accommodation combination. In this year, you can add up the heads, which are not included. You don't believe any J A. That is Jack and true. If he or she says that we're absolutely harnessed meter credit card commercials, they're not. Now what is credit? Good credit card is basically a bank or a financial institution or a financial company. R non financial company gives you a card with a certain limit so that you can spend. For example, I have a card from ABC bank with a limit of $50,000. Now I use this card to buy an important luxurious pen costing $5000. So I have spent $5000 on it to repay this within the set due date. That is within the set deadline. Say tent off every month. So before tent off next month, I need to pay this $5000 which have already slight. Now, the important question your is is it worth paying the interest on the credit card? Let me tell you, it is not a credit card on an average charges you most to 29% and full rate off interests. So, for example, every ₹1000 which you spend, you end up paying $290 extra. And really, I have ignored the power or the special power of compounding most of these blood suckers to charge. Hence, please keep in mind it is not worth paying. I'm not saying it does not both paying your credit card dues. I'm just saying it is not worth paying the high interest rate. So wipe off your credit card dues as soon as possible. Come on. Can't I just simply do a balance stance for on my credit card. I can transport the outstanding amount from one card to see bank to ABC Bank, right? Yes, that is the most existing to do. But wait. Once you do, the balance stance for your liability hasn't gone. What you have to pay, you have to pay. In addition to it, you pay extra charges on transferring the balance of your new credit card. Plus, you have created one more history off your credit card. Outstanding will touch upon this point in a later like choose. But for now, just remember that doing a balance transfer from one card one of the card is not a vice choice again. A rex like Be aware. This is something which you would be in a better position to answer, right? You already have gone through your network. Your expense. She Your house will buzz its feet. Correct, not just filtered out nonessential items like spending on a burger, fast food spending on a lottery ticket or a morning cup of coffee or lati and so on. It's an exercise for you. Just pull up the Excel sheets on figure out non essential items the items are the things that you don't need to sustain. Are you ready? Are you ready, Fidelity? If what They'll suddenness thing. I'm ready to join 20% club and I whatever you own or whatever you make in a month, just keep aside 20% off it and spend 80% off it wherever you want. Expert The planned expended to on but it sheet ensure that your minimum sustainable dues are paid. If we saw in our previous videos let me show you a simple example. Suppose you make $10,000 a month. You keep us 20%. That is 10,000. 20% is $2000. $8000 is what you have that you can spend on various expenditure despite the household budget and expanded. Just you do. If you prepared this will help you to join 20% club. Initially, it will be hard for you to maintain this 20% to issue. What do you need to do? Is you need to start as soon as possible to reach to this 20% club because we know you reach there. But it would be for you in London and in case If you're sort off funds then are sort off money just reduced the unnecessary expenditure. You'll be able to manage this on Greece. This 20% club cash flow planner? No. Is it like a floating rebel? We're in. Cash flows on. We have to plan. That's something similar to it. Cash flow is basically what you received that influence on how you plan your out flu. You will say how is it different from orbited earlier? This will help you to understand the inflow. That is how much I am I making on also will help you to regulate your out flu once you know your exact cash flow. No. In order to understand our cash flu, let us open up the excel sheet. Andi, please complete the exercise. Then we'll understand how much is are in flu. And how much is our outflow? Pause this video and opened. Excellency, you're we are better Cash flow Planet tracker. You can call it what is one and the same Now, what didn't CEO is it gives a heading total income. Yeah, I will put in whatever income I own. Whatever income you one, you can enter the number. Just enter the numerical value. Let's say you want $72 million on mine. Any Miss Leanness and Comey, you make safe $1000. Well, until you. So your total income is $71,000? No. Whatever is your monthly expenses. This you can copy from the earlier expansion, which we have already prepared. Well, planning a monthly budget. All what you can do is you can simply type in the number while you consume blue type in the valley. Okay, this will give you total expenses. So total income minus your total expenditure. That is your total spending, which you do Whatever is left to work. We'll give you a net leftover. That is your neck. You stroll down. You will also, and less investment cash flow. It is important to understand from teachers who says we are guarding doing cup. It could be a sale of property. It could be a sailor facet like equity store bone, except or it could be just in simple as interest income. This entered the value, let's say 8800. And now what did expenses on the investment? Is there a charge, which is that which is known as entry exit load. This will cover it up in my life. Cover up the Englishman section. Is there any commission which are paid that I'll enter you any of the taxes we just there, that island to you and any other expenses which has been in court. So the final value is the net Really that you will get off your investment. So you made an investment off your 1008 $180. The net value is 7900 11. Notice this gives you a basic idea about your cash. Flu isn't how you can plan on track your cash flu. Why, This is important. Suppose your net is negative and what you have to do is you need to either reduce your total monthly expenditure, increase the sources off income that tricks to increase their sources of income. I will discuss this while we cover up the later sex. Believe me, now you're going to learn the most exciting room. The rule of six. It is not heard the six which you play from your back and you hit the ball and it gives us six. It is the absolute minimum living expenses that you need to maintain you sustain your life . How do I tell Clearer than what I have to do is calculate essential expenses between already seen in a previous videos on. We have to add up the total off those sustainable expenses. That is, the minimum expenses which are required to me toe have a roof on my head as well as food in my stomach on to send the kids to the school. This is, to put it in a very simple plain language on multiply it by 66 is basically for six months . Why? This is important. Suppose some unforeseen even happens. You meant it. You God forbid you met an accident or there is a natural calamity or something Unforeseen happens. You need to be able to manage your expenses now the minimum absolute minimum expenses for next six months. 3. Section 2: Rules of Personal Finance - The Easy Maths of Personal Finance: it is not important where you are today. It is important. Very want Toby tomorrow. So let us learn the rule off money. This is very exciting news that you can use it as a party trick. Or you don't need to be a great mathematician to understand personal finance. The rule of 70 to the rule of 78 the rule of 114 the rule of 69 and must move. You might have never heard or seen this rule where this are very powerful. Rules off money. Let's start with drool off 72. If I ask you, how much time will it take? How you might have this question every time bothering you? How much time will it take to double my money? How much time will it take for my 10,000 to become 20,000? Formula is very simple. Whatever is the industry just divided by 72 that will tell you the period other time it will be required for the interest rate on for your money to get double part of me, that is the amount of time that would be required for your amount or money to get double you know they're double bonanza. Let me give you an example. For example, let's see. The rate of interests is 10%. All you need to do is State 72 just divided by 10. So it will give you 7.2 years. This 7.2 years means seven year, two months will take for the investment to become double the rate of injustice. 10% Fantastic light. As I promised. I made it very simple, right. You understood. Rule of 72. Now let us understand. Rule of 78. Let me ask you a question. Is it worth repaying the loan earlier than the contractor tenure or earlier than the loomed in you? Let's look at rule off 78. This will give us our answer. The fourth month. We pay the interest that this trial divided by 78 off the interest in the second month. 11 off, 78 off the interest. Let us assume that we have taken alone for one year. So the interest out go would be well divided by 78 in the first month. In the second month, it would be 11 divided by 78. Likewise, it will continue till the 12 month now say at any given point you want. Oh, after 10 month, you decide Toe new Zaloom Is it worth losing the loon? Let's look at this example. Let's say you bought an iPod $4000 but an angle rate off into So and will passengers rate off? Say, 20 person after tent beaming. You deserve letters, evaluated fifties word to continue the law or close the loop. So the amount you're is $1000. The rate of interest is 20%. So I paid 200 as an interest. That is, 20% of 1000 is 200. You can pull out your calculator and campell it. Now you will not pay two or 78 off the interest because that interests is spending to look . You're on the level Monte a lot. Okay. On the 12 month, he won't be correct. You're with me to know confused. Okay, let me explain. You have been interested. 10 months, that is three off 78 11 month and 12 month industry. One will pay. So we'll be doing the calculation for this. So you're not paid to 78 off the interest on 1 78 off danger. So the time rule toe at fraction. Don't get confused now, Tom Ruto at a fraction that is, to 78 plus 1 78 is eat the bottom as it is on. Add the top on the upper portion that is two plus 13 and feed the bottom. See, that would be 78. You're with me, all right. See? So two divided by 78 plus one, divided by 70 that is three divided by 78. If you just punch in this number that there's three divided by 70 year, you will get 0.38 in your calculator. So what we have to do is the interest which we were supposed to pay was how much? ₹240,000. Finance between God for an iPod for one year will multiply this 200. By the related we go notice nine inches the trigger. So zero porn 38 into London that comes to $7.6 saved not just actual saving, so I think it is worth toe clothes lune before one year. This is how you can take her decision in your life by closing any type of loan beat a personal loan, education loan, consumer do a balloon or any other type of finance. No little look at rule off 69. What is this money rule off 69. You remember the concept of compounding? Very. We're getting flat on flat. Absolutely. You remember the concept of compounding. You're when there is continuous compounding happening on a particle. Oh, great off interest. Then we use rule of 69. For example. Let's say you want 10 lead dollars to double, but you don't know how much time will it take for it to double. So what you do is in case if you're getting a continuous compounding effects, say, for example, your and just is getting compounded. How fairly in a three months, all whatever is the continuous compounding period. Or let's say it is getting compounded and Billy and it is getting compounded continuously. You will use the rule off 69. All you need to do is 69 divided by 10 that the rate often just we have assumed that the rate of interest this stain person or the annual percentage rate is 10% so it would take approximately six years, nine months for a double using the rule of 69. Hope there is no confusion all year till now. Okay, One question would be there in your mind that because we know now how to double our money, how to triple our money. Can you tell us how I make my money going to plate? Or can I make my money to become four times? Here is the rule of 144. I have a solution for you. Let's look at it. Ruler 1 44 is basically taking 144 dividing by the rate of interest lessons in the rate of and just just 15%. So 144 divided by 15 will give you £9.6 years. That is precisely nine years. Six months. It would take at the rate of interest off 15% for you Toe. Have your money for do plate that is $10,000 would become $40,000 in approximately nine years. Six months. It the read of injustice. 15% The rate of interest portion you can modify ass pulled the current re whatever you are , only they want to have a pretty off one groupies. So I understand the money rule off 15 15 into 15 into 15 is a good one. Cool. How rupees. 15,000 invested monthly for 15 years at the rate of industrial 15% would fetch you one crew rupees. Quite simple and easy right? Have converted this into dollar terms for you to understand. For people those were out off India. So I have taken $1 equal to 70 earpiece. So $240.28 monthly invested for 15 years at the rate of interest or 15% or annual percentage rate off. Return off 15 person will give me one like $42,000. 857.14 This is the power of compounding a truly earlier. The longer the 10 you, the more the compounding the more is the effect. It works like a re prolific curiosity doesn't stop you Now I know I can double my money. I can triple my money. I can make my money four times. Can I make my money eight times on? Can you help me out? Here is the rule off money that is to 88. What do I have to do? I have to take to 88 divided by the rate of interest. Wait here. Divided by that. He doesn't just give me a period on my money to become eight times. So, for example, $10,000 would become $80,000 using the rule of 28. So, let's say rate of industrious 10 person. So to 88 divided by 10%. That is approximately 28 point it. That is 28 years, eight months. It would pay for my money to become eight times in the head of injustice. 10% hope you enjoyed the rule of money. 4. Section 3: Behavioral Finance: well, briefly. Look at behavioral finance because this is what influence our decision while we make investment. That is why this topic is important. Remember to lose number one. Don't lose money. And remember, Rule number two, that is, Do not forget Rule number one. Now, what is behavioral finance? Behavioral finance is basically human behavior, which is influenced by our own biases and experience while making decision. No. You'd ask that my money is different for different people because our thinking, our perception towards money is different. It differs from one person to another person. You would ask how it differs from one person to another person. There will be one set of person who would be more inclined toward savings. There would be one sort of person who would be more inclined to our spending. There will be one set of person who would be doing both and now access quantity so that flat when he is different for different people, some people may find it very difficult to spend some money. Some people might find it very difficult to save some money. So that is how our behavior in Panta Investment decision Now they're so do important factors which influence our behavior. What are those factors? First, this confirmation bias, like paying more attention to people or ideas that you agree with in short, people up. People are prone to believe what they want to believe. Men's are one, as I'm since shapes our behavior. For example, if a person has made some money and derivatives, they would think that derivative is one of the best instrument to invest, regardless of you telling him where that derivative is a risk ace instrument to invest that is an example of a confirmation bias. Are you one of the few people who always would think that? Do you hope it for something for a product or a service or an investment? Often our behavior is biased. Wordsworth waiting for examples There will be few set of people who would regret that they were paid for the product or they didn't actually need it. That product are that investment. For example. You often end up being extra for insurance plan with may or may not be required, or you might have under poor. You might not be requiring that. Are you paid extra amount or took extractable, which was not actually required. Now this bias removes another fascinating Terry is about gambler's fallacy orders Gambler's fallacy. As the name suggests, if they gamble between two, even you got less of two independent. Even, for example, if someone has lost money by investing in tow, are you leave without that is unit Ling insurance plans? They will think that regardless off. Also good or bad that productive they tend to lose the money and future. That is not true in most cases. Have you noticed something that sheeps always travel often tend to stand in line off you, which is more crowded than the line, which is less crowded places which are more crowded than the places which are less clouded by because we follow the herd mentality Notice herd mentality? It is basically an investor's natural instinct to go with masses. It simply means that the investor doesn't have a rational view on certain investment, but more likely toe deviate where the majority off masses moving, for example, my neighbor has invested in tow extract. I should also invest into extra example. My neighbors, my friends, my family or anybody from Milo has invested into extra. I should also invest into extra now did the herd mentality. But then we naturally spent to do what others are doing in stock market. We generally don't invest in the price. Is advising rising rising on one set, free to speak. We buy that stock. Why? Because off Wiener schools it is also a type off mentality wherein the baby you try to win that a few tricks of behavioral finance. A bad judgment was, is a good judgment. While you make bad decisions in late because we are humans be approved letter. We should always convert that bad decision into good decision. Our bad decision should be backed up by a good judgment by because if you have got into a bad Goodman, you can always work on it by coming out of that judgment. Our own perception influences us the way beating the way we received things in practices. It is also important to change a perception that influences our decision making in every day's like even in case of Muslims. And as you should try toe work on the anxiety to buy. When the marketers rising and the anxiety to sell when the market is dropping, we find it very difficult to hold onto investment which is not doing well while the market is dropping because they tend to not do well. But the market is fully. We should in fact do something known as stop lost. All we should find out The V is very. We could minimize their losses. A few other tricks off be able finance are investing would be controlled. The output can be controlled output. Can we control the outcome? No. So we need to take a calculator. Just calculate addressed me You to calculate interest in a manner that is that I just able to us. For example, if I'm making save ₹10,000 a month, I should not putting ₹20,000 in the market where the chances of losing entire 20,000 is high. I might parking, say, ₹2000 or maybe ₹1000 that much I have taken a calculator addressed. It is very important work on our feel. Also, we should learn the psychology off buying low and selling high that does Bill on asset. The worst enemy today is on a good friend. Today is social media. If someone is doing something on social media, I will also do something that is no nest imitation. Also, we have something on a CDL, not this compulsive desire to spend. We see our neighbor buying animosity were also inclined to have our all that most cities. That is a compulsive behavior, which impacts often is very badly. So now that we know all the tricks, you can be more aware by investing on making financial decisions. Information overload, the year in information age, where were loaded with do numbers off the done information. The information processing demands that on an individual's time to perform interaction on internal calculation exceeds the supply capacity of the time of the level for such processing, let me put it in a simple man face with more information than a human brain could handle and process. Human actually does do simple. If I the decision making, for example, a stock exchange analyst may have toe do my people forecast and calculation before giving out a particular stock trained or analysis. But in order to do that a lot of time and demands and it commands a lot of time. So what they do is they add up to a simple predictive strategy. Andi releases the data. Let me give you another example. We are loaded with Lord off options while we by any financial product. For example, let's take an example of mutual funds. If you have to buy about the class out of mutual funds, there will be multiple website. There will be multiple people on multiple financials. Panel who would give their own views on there would be already due to load off information of the level. What happens as we tend to adopt a simple investment product because of the information overload? Everyone knows us has this big e g o ego. That is overconfidence. We tend to overestimate the accuracy off the production, for example, do to your confidence. We tend to ignore the negative are bag or the serious risk, which could be associative with particular investment decisions. For example, you might invest into a value stock, which you know that it might go in tow, a negative gadgetry, or it would give you a negative return. Or it might also file up a bankruptcy by because off overconfidence. As an investor, we make another mistake off anchoring. What does this mean is that we rely on past performance on we tend to invest on. We tend to immersed and buys our decision towards investment that should be awarded. The past performance never guarantees the future performance. We are very emotionally connected with the world loss. Why? Because regardless of what so ever happens, even if we are getting a negative return, we we tend to hope that the returns would be positive. All it could be recovered in spite off earning or making the lowest earning. It is like jumping off 1/3 flow with the whole that it won't hold. This doesn't happen or the during actually work while investing. This is also influences human, bigger. Why domestic Now we are very much connected two people things or productive, which we have some familiarity with. For example, if a person is very good at understanding off Cryptocurrency, the person would be more inclined towards investing in local currency. Because it has some familiarity, a biased investment decision is undertaken. The often might have seen people who speak very highly about a company, regardless off its performance. For example, a stop when it is performing well. They would praise praise and praise, and when the stock is not performing very good often exploit easy company. They will come and tell you how this stop well, profound, better in future because they have similarity by. They have this strong liking towards particular thing apart, particular product that influences our behaviour. Last one, we tend to help what others are doing. For example, if others are putting a lot of money into a particular stock or investments key, it might be a fraud scheme. You tend to invest in that. For example, they're not a fraudulent cheap funds, which are they. Friends is like small fund, which is created by a group of people to fraudulently extract money out off you. That is also a human mentality which impact side investment decision. Now that you know what impacts or influences our behaviour while making investment, you would be better there to make better decisions in future 5. Section 4: Risk Profiling & Asset Allocation: What is the risk rescue? Something that will not leave you in. Whatever you do risk is simply the price you pay for an opportunity to grab an opportunity . Risk also means uncertainty or uncertain things. Possibility of damage or harm also means wrist are uncontrolled. Loss is also a wrist. It's really you're being footing right? Wrist? No, you should take it in the right spirit. Let's first tell that this isn't that you want to hear the rest. Me, too. Let's tell this bearing the rest Little it'd mean tailing the seat off. People staring the risk Human dance Full Ellen eMate Award Already transformed means sharing the risk. Most of your insurance company does this the share, the risk that this transfers the list can be eliminated. A list can be award, that is, Yes, we can. We can eliminate their list by using the seed built by having an airbag in the car following the traffic signal, crossing about as a broke closing crossing. My average is there for us because the rule it is known as leave no closing. We can award risk how we can award risk. You can award us. We're not talking toe someone on the cell phone while we're driving. We can also warders, we're not going out off situation like tsunami or a American order tender stone. We can retain the risk. Also certain uncontrollable circumstances. We have toe let it happen. For example the car values going down that just we can't do much about it. Only thing is, you can let it happen. At the most we can do is taken insurance. So remember you are there with you. Be brave enough to be bad. Have something at the beginning. This come from knowing you are the list which you always state This comes from north knowing what is going to happen or what you're doing. We cannot predict what is going to happen but we should know what we're doing so that we can reduce the rest correctly. Award there is transferred arrest. Life is beautiful, isn't don't let the person who is beautiful love the person who makes your life beautiful. You, I meant by the person is the person who can help you to take calculated risks so that Hume investments and savings screws. That's why life is beautiful. Now let us give a type back to this risk. What I meant by that is blind action and tackled a list of a proper plan. Have a proper action on have a proper or map to tackle the rest now. Well, do I remember Plan? Plan means I should have a solid investment or savings plan. We understood that how we can control our expenses and how we can manage our expenses regardless off if I'm earning monthly or if I'm owning on a recurring basis or my income streams and out is recurring or not regular. Using the calculated household expenses Street and the budget ship and also planning using the cash flow that is the cash flow. Planning no action. We have to act. Suppose if I'm losing on the stop, So do I have to keep on holding that stock? Or do I have to put a stop loss so that my risk is many miles? Or do I have to leave the stock if the company has gone bankrupt or it is going under liquidation? No, you need to know how to tackle the risk. That's why you have to give a tight back to the wrist. So before we jump into understanding the investment products or asset class. Just let us understand what are the various risk as for our life state. So for an aggressive investor, I'm very aggressive. Should put in about 80% into stocks that is, will cover water stocks, bonds and cash stocks is basically you're a shareholder in a company, and you are investing in the growth of the company. Bond is basically where company is taking money from you as a loan. Better be 10 assuredly or guarantee off paying you some portion off interest known as Cooper Will touch. Opponent will understand this in greater details. Then there is cash. Cash remains the Hardcastle physical cash, which you can pull or cars informal. Other investments, like in liquid funds, are in in in fixed departures and stuff, so an address ING investor typically is in the ring off 20 to 30 years. It doesn't mean that a person about 30 years cannot be an aggressive investor. It is up to your risk appetite that you can decide whether you fall under an aggressive car degree. Our modernity, I basically category or a conservative category. The next risk profile, often investor, is moderately aggressing. People were between aged off 30 to 45 to invest about 60 to 70% into stocks. A smaller portion like about 20% into bonds or fixed instrument on keep some portion in cash or some emergency expenses. The next profile often investor. It's conservative. You're what I want you to notice is the triangle is a poor monsieur. The risk appetite is very high. As the each increases, the risk appetite reduces, hence the moved towards more secure option. So what we can see is the triangle has become inverted that this it just turned upside down . You know what it means that I'm trying to reduce my risk by reducing my exposure to stop to up to 40 40 to 60%. Then in bones about 30 to 55% year, I've increased their location. Location is the amount which I'm parking in supposed out of 100 design parking in about ₹55 in two bones off $55 into bones. That style keep about 10 to 15. It wasn't as cash that I was ever depressed. Profile. Often, Investor is between the range off 45 to 60. Then we haven't set off investors whose risk appetite is much more lesson. So they fall under the age. Look off about 60 to 75 but in the stock exposure should reduce to 20 to 25% bonds and fixed instrument up to 60 to 65% between 50 to 65%. Cash should be a between 10 to 15% because of emergency expenses or some small expenses that needs to be carried out. And then the last or the highly conservative state is very in a person region about 75 years off it. Do people really live up 75 years? Yes, the reasons. Worldwide population statistics. Who's that? An average life expectancy. Our people have risen toe 80 years from 75 to 80 years earlier. The early life expectancy ratio was less. Now it has increased. So you have to plan for a longer life. And I held their life and of sound financial life. So in this stage, you need toe reduce your exposure towards talk. I didn't mean that you cannot take rest. What? Your list you subtitle minimize as much as possible because your capital preservation is more important. Your investment to be preserved is more important because you don't have adjustments or something come at the state. So you will part up to 70 to 80% into bonds and fixed instruments on you. Keep some portion into cash. So this is where this risk before that, we looked into so in a triangle. Aggressive investors is sure as dark segments on this person has a huge risk appetite and and I just not off Risks related deserves very comfortably. Moderately aggressive in most of moderately aggressive investor can digest Pisa, not addict men that moderately exclusive investigating that this, say 5 to 6 pizza. But yes, moderate. This wasn't also has a good appetite. Appetite. IAM is not being hungry. Appetite Liamine Rest Taking capacity or ability. The conservative investors fall somewhere between this. Hence, he is like a violence, the one who take a conservative. You'll tryto reserve his capital more that will gain less by investing into less risk instruments. And as the eat increases their risk profile changes from adversity who highly conservative most of the financial planners or investment managers will not tell you the risk, appetite and really justify It is important for you to assess your risk profile by the time rule that, as for your age, you should categorize yourself and ask her how much you just you can. Hey, Mrs. A priority that you need to decide. This is a tested model, which works for almost 90% of people, but it may very from person to person. It may slightly very, from an individual to individual. It's very important to understand the rest aside before making any investment decision. There is always a trade off between just land regard that is risk embitter. I had the rest you're willing to take. I would be the return Lord. The rescue willing to take lower would be the return, but it doesn't mean that you take too much off risk so that it becomes in simple terms. It means you should not for more coffee than water Cup could fool, so take risks. As for your risk appetite, there is also arrest reward or less told in smart tricks. There is also a rest Children metrics, which has four important component the time or the time horizon. Would you have for investment the commitment that you have the current commitment as well as the future commitment. The various schools which we looked into then how much money you have this you can come to know from your networks sheet and also from the cash flows sheet, which we practiced in earlier tutorials. Also, the number of dependent had a number of dependent. No, would be the rest tolerance over the number of dependent. There were high risk tolerance as well as the age on building this to take risk also matter . 6. Section 5: Foundations of Investments & Investment Products: Before we move any further, I want you to do a little exercise stand up on drama. I literally didn't mean their standard. Instead, Schuessel let us understand few basic concepts for you to understand. The Advance Lee Simple topic off investments. It is exciting, isn't it? So we look into investments and CDs. What is interesting? What is animal person to his reporter? Return. Total inflation on. We'll also look at this is going little risk, you know, Don't worry and a bit you along Investment are saving investment are saving are two different things. But to simplify will just assume that investment and savings are one and the same thing. Saving is basically what you are left over After you have spent months, the safe fund is invested into readers, investment instruments or various investment avenues like fixed deposits, talks, borns, Cryptocurrency secret center that becomes your investing. A simple formula for that is whatever I own miners. My expenditure all spend which I do not, is my saving months. I did this saving on. Put this saving to work For me, that becomes investment. It doesn't mean I pull out my saving and protecting the gambling sort of thing. And that becomes my investment. No, that is absolutely no. That is absolutely no investment, which I'm talking about. That is not the context. Who were you? Let's say your income is $10,000 you expenditures about it going $5000. So you say close to $1.5000. That is your saving you. Me? Everyone has liking towards something That is interest. No, not liking is not interest. Interest year is simply I pay you flat. It means I give you something in return for my money you have given. Let me explain you by giving an example. Suppose you give me $100 I agreed to pay you flat. 10%. That me for one year. It comes to $10 so I'll get for one year. So I make $100 less $10. That is my interest. Now again. For second year I get 10%. So I get $10. So I get $20 for two years on an investment off $100. This is basically a simple interest minutes. What table principle I have. The principal will remain constant. That interest the flat part is not added to my investment. And that is why did known s simple Inter. So first year I would get $10 taken here. I would $10 at the rate of Temple before I explain you the interest part in more detail. Let me the roof off Famous school by Albert Einstein. He said compound interest is the eighth wonder off the bull. He or she who understands that owns it. He or she Who doesn't, is it? No. Let us understand what exactly he meant by that. In the previous example, we saw that I pay you flat men's. I just give you a plain, simple interest rate off temple for the first year also for the second year. So the total interests which are made in my previous example was just $20. No one component is what happens on the same $100 investment. I get 10% for first year, so 10 gets added to my principal. It becomes $110. Now this $110 interest list this $10 extra bitch I got gets me another 10% for the second year, so I would make $21 for the second year. So the principal or the final amount, which I get where you is 100 and $21. In previous example, we just got 100 last $20 extra that this $120 Your we got $1 X. This might not look that significant off $1. If you compare this with longer, figured, have, say, 10 years, 20 years, 30 years, 50 years. The compounding is it is much higher can most larger so they always benefit from the power of compounding. Don't worry. I'll tell you how to make most out of this compound portion that is, I pay you flat on flat. It does interest on interest. This brings us to the next very exciting concept on with percentage rate handle Person is rate a pia. What does that angle means? Yearly rate of interest is the flat rate of interest quickly. So now, instead of simple rid of intensive gets compounded you the interest it is getting component . So annual percentage rate is nothing but the yearly rate off interest which gets compounded on Boulder Vinters, which we pay our between on a particular investment now you would think. What is this Animal owners return? Do I have to return home? You have to return to office. What is this? Return? Return is nothing but change in value or the price. Often asset or investment were time. It is expressed in a simple for Wasn't it change off right off investment or innocent overtime? Let me give you a simple example. Suppose under dollar, you're being master. That became 121 concerning the power of compounding. So the price changed from 102 121 in two years. That was a positive teen. Now say I have invested the same 100 dollar on the price change went to downward and it became $80. That is negatively to so as an investor be always one positive things, not the negative things. So readers can be idea expressed in positive terms or in negative terms. The more positive it is, it will give more positive smile. The more negativity is, it will give us a lot of stress and anxiety. Don't, buddy. That's why you need to understand this few concepts before we jump into investments. What is inflation? Inflation ended storms tries to tells you a story that I reduce the value off your money. Let's slap this inflation, isn't it? It reduces my value of money. So $100 bill, it will reduce it to $80. It doesn't mean that my $100 bill comes $80. It will just mean that, uh, suppose I was purchasing a pen for $100. Say, after three years, the same pen will cost me 100 and $50. So what it has done, it has reduced the value off my money. It doesn't mean knows there was no loss of it, was there. It was just negative. Return on. Your value of money now does North. So inflation basically reduces the value of your money over time. And this Morgan will look into various types of investments, their risk profile on the rest associated with this investment and how we can make investment. So we'll start with stock equity and my peers. Then we'll head towards mutual funds, then really stayed on commodities like gold and silver, then fixed instrument options, bones exchange traded funds, people for the move into understanding off insurance. Very well, understand life insurance and gentlemen, shoulders. Life insurance secures our life, and general insurance is for other than life Kabul, which is there and we'll look into small saving deposit schemes or small saving schemes, then will touch upon derivatives crypto currency, which is the most exciting part. But it is a risk eel, this investment. Then we have private equity and startups on. We'll also look at some other investment. Every news which are there so far we have looked into were schools on. Now we look into how to achieve those goals by a business, investment or investment asset class on. We'll also understand this market and how this asset class are bought and sold and the risk associated with No. Before we begin, let me explain you the concert off equity. And then I peeled. Whenever a company is planning to raise funds, they will reach out to various investors. They will go and meet, maybe 1,002,000 or 5000 investors directly on ask for money on David issue. Some start up ownership that is initially known as initial public offer. Initial public offer is issued from the primary market because there is no stock exchange in bold commission public offer basically means the first time offer, which accompany gives to an investor to invest on B did them for long term. Now this investment is between a company on an investor. Let's say after sometimes the individual wants to sell off his ownership to liquidate his investment. Hey, will goto a secondary market that the stock exchange and sell it to other investor hope. Till now, it's clear. So primary market is the market, but in a company immediately approaches an investor to invest. It could be a company. It could be a Goldman. It could be anything they can issue equity they can issue born on their with this other instruments or asset class, not the company or an organization condition in a secondary market. This investment class for this investment, a certain product that listed on a devastated between to investors who are more investors. Now let us look at I peel. I peel is basically the first time off, as we just saw. So how many off your company gets and let me ask you, how many offers do you get? I'm sure you might be getting plenty, but your offer means how Maney investors are willing to invest into that company. So it's an initial stage off most of the companies they're in there raising the funds. It is very important for you to read the offer document. So say higher CTC or say IBM is coming up with an I feel. All you need to do is search for the offer. Document offer Document will give You what other growth prospects or tether business prospects. What is their company objective or other long term objective, How much they're planning to raise and what is their vision? All this is important to understand whether this I peel our initial public offer is good enough to invest partners isn't a good enough to invest. For example, let's say a company's Assert Workers 100 Cruise on the company is wanting to raise 500 schools. It doesn't look that attractive, right, because from where they will pay the investor if they d mine. I. So you have to keep all this in mind, and you need to first find out. Is this I p really voted. Just don't fall in love at first sight tonight. You you need to do your complete due diligence by referring to Wales or for documents were the scheme the letter just and then only take any investment decision now in a pretty you getting ownership of that company When it is stated in stock exchange, it could be a Bombay Stock Exchange or New York Stock Exchange. Dow Jones or any other stock exchange of the world know the important question your is. How do we identify right? Stop my dad. A stock is a good potential stop, or whether that stop would create value over the dirt stop would give me a regular incoming form of dividend. You need to understand one thing. Companies make a profit every year. Some companies investors profit back to the company's growth on. In turn, the value off the stock goes. So those are group stopped by loose talks, those talks or those equities shares whose value is currently not that great. For example, let's say when Madonna started the value off Madonna's will. Not that great. But now they have such a large Franceschi all across the world through their value, has increased. So investor who would have invested into let's assume that mantles was a value stop he would have created a significant amount of wealth, but not all value stocks. Abood. You need to analyze on understand by reading their documents by understanding the roots history. They're too dumb. Rules off investing man, you need to understand what are the broad potential of this company? Number two. What other risk factor, Which is associate ID Now there are some companies were very genders and this thing that let's pay our investors something every year. So they pay you something in form of dividend. For example, out of 100 close they have owned, they distribute 20 clothes and dividend. So that is how you get a regular dividend. Also, the stock is defined. As for the market capitalization. Now, you last. What is market capitalization? Just remember, the bigger the country, the larger would be the market value. A market capitalisation, the small leather company. The smaller would be the market. My little market capitalization, for example. A small coffee shop would have a limited reach or limited amount of people who it can treat . Whereas a large value chain like Starbucks would have reached across the masses like that increase off life stocks, it will have a large market capitalization in case of small values. Talk on medievalist or it will have a less market capitalization of market men. It doesn't mean that large company stop would give me large value growth a large value dividends not necessary. But they're more stable company, the established in the market. Some of the names, like IBM, Google in forces and there are many more are all large cap stocks. Then they're midcaps in small cap stocks with Captain Small cap stocks are riskier compared to large cast off. I'm not saying that gave stocks are less free, but the risk reward return. If you can recall the higher the risk appetite I have all the Haida. Yes, I'm willing to take. I would be the editor. Small and midcap Stocks leaves you High Returns were a longer Peter. Now it's kept. Stocks also gives you return for a longer period of time, but the return off mid and small cap stocks would be much higher if you invest into right company. Now that you have finally made your mind and your major mind on your farm on it that I want to invest in stop, what do you need to invest in stop. You need a bluefish account. You need a demand or trading account D. Mac and a trading account. Humanity is basically where your stocks are held, like your bank holds money in similar way. The company stocks are held in the American, and you need a phone at an Internet connection to place orders, how to buy and sell stocks. My request to you all would be to buy a good quality stocks on hold it for a long time. Long term. I meant more than 10 years, 20 years, 40 years. If you can hold, it will definitely create value. And it beats all asset class. It pretty always beats all asset class one love Lupien mastered in stock market in 1979 with that brutal 3.9 cruise rupees. By now, that is the power off. Long term investment Iniquity and S and P 500 on average gives about 10 to 11% returns. For an investor who has invested for more than 10 to 15 to 20 years, the historical returns is that the the longer you stay invested, the better return, though, or the better capital. Some question would be bothering you that regardless of so much of upset down, how good an investor create so much wealth, it is possible only because an investor was patient on could hold the investment for such a long division. Now, you things that you need to keep in mind before investing into stock market that nothing is guaranteed. I repeat, nothing is guaranteed long term investment, as this all always pays up. Always please. Ah, handsome and a decent reward. And it always beats the world agility. It always beats there was you that a voting rights you get awarding, right? You have voting rights while you own the stock and let me repeat. It beats all the investment product in longer. It literally beats. So in literal sense, it beats all. Investment in long term debt to equity ratio means how much the company has borrowed. How much is the capital contributed by the shareholders? So remember one thing that companies were debt to equity issue means total liabilities by total shareholders contribution. If it is more than one, then it that's talk is considered to be risky. Don't invest into those tops. I repeat very in our back to equity ratio is greater than one. Don't invest on. Those talks to stocks are very risky now. What is price to book value? Tries to book value, help you to understand whether they stop is undervalued or overvalued. Now this undervalued on overvalued means for that day. The stock price is not. As for the price be, then it is known as undervalued, and if it is overpriced, then you consider that as an overpriced off. For example, if you go on by a pen, their real world off their pen would be, say, $200 on it is available for sale at $700 so it'd undervalue if the same pen is available for said $300. You would say that that Venice overvalued return on equity is basically the net income return as a percentage off shareholders equity. Remember the rule that always invest in a company where return on equity is greater than 20 for at least last three years? Consequently, the higher the better. The lower that doesn't scare current ratio is also important to understand if the company has sufficient liquidity. The time rule is that always to invest in a company whose current ratio is greater than one . This all the issues will help you to pick the right stop for your investment. You don't have to calculate most of this ratios, and so I'm not showing you the calculation part. All is readily available on the Internet or particular stock. An important as it class, there's mutual fund. Now. What is mutual for mutual fund is a cool off investors coming together to share and invest from the pool of money. Let me give you an example. Say there are 20,000 investors and they want to buy certain stocks of radius companies. Not single investor could buy multiple stocks correct as the mutual fund was created, where in a pool off investors pulled their money into a fund on that fund. Investing two leaders Companies are various sectors, depending on the fun type on depending upon the risk profile, what doesn't investor gifts and investigate something known as units? There's used to get in equity market. You used to get equity as share or unit. You're also you get unit that unit off with these companies, get units of various companies by investing into mutual funds. Now the value off that sun is known as net asset value or not. Let me show you an example. You can see this fund is a large cap fund which investing to last companies. It has enough. If you can look here than a maybe, or net asset values 85.96. So poor unit price is 85 96. The risk is moderately high. Kanye it on socials What type of fun it is. We'll look into this in greater details. In mutual fund, there is also something known as fees. The diabetes type Sophie's, which are there, and three. Or in order to invest into mutual fund, you need to pay an entry fee that is known as entry load on. Some mutual funds also has an exit load. For example, if you invest before a particular time, Peter said, three years. The charge on Exit Lord that is the exit penalty, like you pay a penalty in 60% saying they they pay penalty. You're in mutual fund. Also, nothing is guaranteed, but with a longer period of time, it creates a larger value. It is a wonderful tool to create wealth with a longer duration. Now There are various types off mutual funds. There are focused blue T funds, which invest into large companies. The large companies, which has a larger broods story on bitch of established in the market, then their open ended funds and close and it funds. As the name suggests, open and the transfer forms very new could invest any time throughout the year on. You can exit any time throughout the year, but that is not the strategy that you should adopt. You should invest into an open and that fund and hold it for a longer Peter. A good open ended mutual fund, and you would would it for a longer Peter never close ended mutual funds. Close ended mutual funds are like I appears. It is not exactly a pill, but it just like an I p O, wherein it has a subscription window wearing. You can subscribe only between this date to the state post, which the subscription is closed on. You cannot redeem this close ended mutual funds because, as the name says, is the funders locked for a particular duration, Then we have something known as liquid funds. Liquid funds are like nearly quit cast sitting in your account it investing toe highest rated government securities de SEC on money market instruments. Just explain you in simple terms. This on some of the most secure investment, every news. The government securities and money market instrument not all but the highest rated what these liquid funds invest into this sort of estimate. Then there is something known as balance or hybrid fund, which has a balance off, say, 50% equity and 50% debt, which gives you a slight before or risk. Then there Brooke funds from this group fund investing to the profits into their business so that the company grows as the company grows the value blues. As the value grows, the net asset value grows. Then there is something known as monthly income fund monthly income funder and my piece. They're popularly known as a My piece. They give you a smaller They wouldn't every month or income on a recurring basis, but this income is not guaranteed, but they invest in such a manner that they will give you a smaller portion off income in a monthly for my monthly in comfort. Then there are other farms like index funds. Then there are the funds like index funds, which invest into stock exchange, they invest into directly into stock exchange. So as the stock exchange moves, the fund would also be moving in the same direction in the stock market. Include is that index fund would increase If the stock market is declining, the index fund would declare We just considered to be more risk your option. Then there is something also loners. Are we transformed? Art, which is basically funded, gives you a tax efficient return. What I meant by tax efficient return is that they invest in such a manner that what about it? Don't you get in hand? Is acts efficient? Means you get a better post, Actually turn in your hand. It is basically in the range of 6 to 8% but that do you have to hold it for a longer period . Then there are other set off mutual funds like tax saving mutual funds, which are popularly known as a pretty ling savings scheme E LSE schemes. This gives you tax benefit upto the reduction applicable or allowed as per your country taxation law. Then there are sector specific funds. The sector specific fund. What I meant by this it There will be Power Sector Fund, which would invest only into stocks or companies returning to power sector. There are infrastructure related funds for student invest only into roads, railways and building and construction sort of thing. There are banking related funds that would invest only into banking stocks. So there's this sector space fixed mutual funds. Then there are also known as government securities funds, or dissect fund, which specifically investing to government securities on money market funds. These funds are considered to be more safer. Every news off investment on the returns are not that good, but it is a safe sort of instrument. You've been pocketing your cash fund zeal. Whatever cash you have, you can pocket into the sick fund or liquid funds or money market funds index funds. We already discussed Mulcaire funds in most in tow. Companies, which are in small category, means they are in just brewing face. They're not that big in size, but the good potential is high. The smaller car funds would have high volatility since it's been growing face. But the return expectation one can have ah as a prudent investor is over 20 to 35 years. One could expect a decent return of about 15%. Good small cap funds. Then there is something known as gold exchange traded funds. Now what? I exchange traded funds exchange traded funds of funds we took traded like stocks in a stock exchange. Now you would see what is gold exchange traded funds. We all are very fund of goal. But now there's keeping a physical gold hazards wondrous. There is a risk off someone stealing it or it would be lost. Are there multiple risk associated with A. So instead of holding physical bull, you can hold gold. Inform off units, that is, mutual fund units, which are traded in stock exchange. That is no no school exchange traded funds. Then there are born funds. You cover this while we cover the bond section and their funds. Mutual funds who invest into global stocks. Global funds would include international funds, life investment in tow, IBM or maybe in Amazon, the other top lister global funds. Now that we have a basic idea off these types of mutual friends, let us look at various options which are there in the Children. Some of the options are brought. These mutual funds invest into stocks will give you a brute or a period of time, then their dividend yielding stocks. Dividend yielding stocks is basically the interest with you get, but that is not guaranteed by mutual fund company. They pay you a regular dividend. Then there are certain options, like systematic with double plan. It is basically a systematic redemption plan, wherein you invest US X amount on you get a certain amount every month or every quarter, depending upon your requirement. This is basically suited for people were in higher age bracket. Then there is something no this systematic transfer plan. Know what this systematic, turn supplying, systematic transit line systematically transferred every month from one as a class to another asset class. For example, it transfers from a debt mutual fund or liquid mutual funds, 12 equity or entered mutual funds. Why, This is important because at times when the market is volatile, time you might not know with would perform well, or it is not the right time to invest. That is the major question Mr each of us have. So in that case, you can choose a systematic plan, So plan, then you can park in your money into liquid funds, other debt funds, and from there it would systematically transfer it into an equity fund. Then there is a powerful tool in your hand on a systematic investment plan. Systematic investment plan is the most powerful mutual for option, which is there. It systematically invest some decided by you monthly into a particular ski. You can choose from the basket off schemes, but the longer duration you fooled, it gives you the power of compounding. When the movie discussed this, compounding the power off and the magic of compounding how are money becomes double people on becomes eight times not just the power of compounding and s I p helped you in a saipi off $250 for months in S and P 500 index one for 40 years would have resulted in tow. A wealth creation off about 19 lacks $80,563. That is good trade. Let me show you a live example. No, see, you need X amount. So just Jack this. Let's assume that you need abode. One clue rupees. Okay, Then let's say you want toe invested for, say, 30 years. You're willing to invest for 30 years on expected rate of return? Let's say Let's save your very conservative let's say expected rate of return and say it. Person Nurse Azuma does a person. So this is the amount off S I P that you need to do you do to achieve your dream off. One cool with their deals. This is the power of compounding. This is a power off the saipi. No, si. You have some other option like you want to invest whatever multiple members said. For example, you can invest 20,000 well month on Let's say you can invested for 30 years. Can you see the power of compounding at 8%? Now say, if I so let the mix off would fool you and mix of asset class. And that on an average gives me or return offset Well, person, my return would be or the world which would get created is close to seven crew rupees mixed in dollar terms would be much higher. So let me go toe exceed dot com and converted into dollar terms. So let us copy the well, which is God created in rupee terms and let's converted into any of the bold currency. This is Hannah, that is in the new piece. Let us convert it into US dollar. At today's exchange it you make nine like 17,651 on $09. That is quite a decent sum. Likewise, you can put any other currency steak with which in palm, and you can see what is the amount? A bill that would get created. You can also put in the amount, but you can invest, see in your currency, say, in India. New business. I'm investing 20,000 in found. I would have to invest So £210 per month, this amount and very from country to country. It's a very interesting toe. Just try using it on. You will understand the power of compounding no letters, understand some important benefits off investing into a saipi. They're, well, powerful benefit off investing into a city that is average out our cost. What it does it It average out our costs. For example, market would be up. Sometimes it sometimes it will be down. No value. Net asset value keeps on fluctuating. So what it does it, it will buy at various levels and it will average out my cost. It's systematically bills with that. We already saw Howard systematically. Bills will, by using the power of compounding it is the best long term investment. It also gives me the trials of diversification. I can choose toe invest into areas funds. The choice of funds is with us. There is no need to time the market. You don't need to say 10 very What would happen if the market goes down? What would happen if the market is that B? You don't need to do anything. You just need to select their 10 year. So let the funds select various farms, starting a saipi and leave it on a monthly basis. Suppose you miss out one or two escapees that you should not miss out due to some financial emergency. You can always continue investing it or you can park in that funds. Then you have the money with you. Also at S I P is very affordable. You can start with a small s $500 to $200 to 500 apiece to fight a little piece toe any large amount there is no upper capping on starting an S i. P. It also gives you and convenience off investment. It will help you to achieve a lot off your financial goals just by using this powerful tool of S I. P. It also takes into account the inflation adjusted return that is known of indexation. For example, if you say that if I did in the accession into account that is inflation into account, I will have to pay certainly X amount off tax on my investment. Or if I do the core part of indexation, that is inflation, I will have to pay more dots on it. It depends from country to country on investment schemes to schemes. Mostly it is very popular in case off mutual funds. Then remember that I'm rule that nothing is going into the mutual funds. However, in long term, it pays a decent value that we just saw. So this is the 12 powerful benefits off investing into a saipi start today. Start now and start no. Also there six things that as an investor you should avoid while doing in a society you should select appropriate among it does not that you will select. So I wonder to peace today. Tomorrow you park in 50,000 day after tomorrow you park in 1000 That does not write me off investing into a site we decide animal deciding goal and then investing to a safety. Please, please And please do not stop a saipi suddenly on. Please do not stop your recipe because if you stop your saipi, you're sacrificing on your well creation goal and your goes were it handler and please do not stop your s I p doing my humble submission to your If you feel good being a saipi, if you miss out any installment you against restart, that's not a problem. There is no perfect timing if you wait with and think there's neighbor or tomorrow which is going to come. Always choose the best mix off funds basis the rating bases the reputed rating basis the research Do your wound research as well. Do not invest in tow s i p for shorter duration. I repeat, do not invest into a saipi for a shorter duration. These are six common mistakes that you should award as an investor while investing into a safety. What Israel State really. State is also a type of investment class, all in investment product. Now the investment in property is known as realistic. Now, real estate is basically the physical tangible asset that you have. It is not very easily liquid able assailable. There are a lot, of course, picture related or associative. The date. Also the location where the real estate all your property is matters. A good rental value also matters. There are four major costs which is associated with a real estate investment that you should keep in mind as a prudent investor. Number one. There are a lot of legal fees which are associative with buying and selling off property. The most common is this time duty on the registration fees, which is there. There are also maintenance fees that you need to be that would be for maintaining the property. There will be taxes which you need to be on a regular basis. There would be certain insurance course that you need to be for a property, our property investment, and there will be other miscellaneous expenses that you need to bear on a recurring basis, like repair and maintain ings. These are some of the costs, which is associate ID with investing in real estate. There are seven the 20 already in off investment investment that you could choose from in Cuban, either by a residential property or a commercial property. Residential property is for nonbusiness use. Commercial property is basically for business. Use that you can lend it to a company or for office use. You can lend it to anybody. There are also properties which can fetch your rental values that is rent on a recurring basis. You may also buy land. You can construct the house, and you can construct either residential or commercial property. Depending upon you, you can either create a recreationally sort off property there in people visit to have a fun time. Or you can own a farmhouse, which you can invest. Then there is something newness, real estate investment trust. This is a very unique type of investment. Real estate investment. Just it isn't known as are the I. D. Is a type off investment just or an investment vehicle that you can invest in tow, real estate or real estate related asset. The 10 intention toe all income. It is more or less like a mutual fund Jarabulus advantages of investing into relisted. Just it is is irritated on stock exchange. Somewhere you can buy and sell, an investor can expect a decent income off up to 90%. It also helps in your diversification off your portfolio. Now there are certain disadvantages also off investing into real estate investment trust. That is our reality. There is limited growth opportunities. Dividends are always tax able, and it is start in the handoff investor performance. All those depends on the real estate performance. There can be over I D off real estate investments that Israel estate investment just It could be a pretty insulated what it could be. Mortgage. Or it could be a combination of boot. It could be a private relisted dust. Or it could be a public, non listed real estate just and much more. There are 13 costly mistake. Well, investing into realistic you should avoid. Always do a background check and a background research that is very important with most of the investors. Don't do always conduct due diligence and find out what is right. What is wrong about that property. Always do our due diligence and market research. All this evil with the market. Do not hire ages of fictitious agent All road on engaging. Always take help off a bona five agents. If you really want to buy a realist it, please do not by any property. I repeat, Please do not by any property or investing too realistic, which is out off your budget. Suppose your budget is off one night dollars don't extended to two like dollars or, let's say, one like $10,000 that is not worth buying it. Remember the rule that no one gets rich overnight? If you think that the famous investors are becoming rich overnight, then that is met. They have become rates my staying invested for long toe. I'm not saying that stay invested more long term in this asset class, but always while investing into this type of acid plus, you should be extremely diligent. You knew this search on you should carefully select the property. Also, it is important that you should take into account all the expenses which are associated with the property. Most of the investors big news. Most of the investors doing pay much attention to it. Please do not make this mistake. Please do not say exotic funding there would be. Many agents of book would would like to find you in a structured manner by creating an exotic product. Please don't. They didn't do it. It does not work it. An exotic funding would be like. Initially, they will convince you that you have to pay a lower Armando monthly am I That is acquitted monthly installment. But with Peter, that is over 10 20 years, 30 years. You hear miles would rise suddenly. There does not want it. Don't get into exotic funding. Do not, I repeat, do not rush for a deal on. Do not hurry for a deal. If you rush for a deal, you might make some mistake, which would be very costly. Always read through. The paper will always read the fine print. Always read the agreement. Even if you're not a lawyer, you can understand basic terminology is see and find out if there is any legal plaza legal hassles, which is there. If you're finding it difficult to understand, take help off lawyer. They they'll be in a better position to guide you do not just, I repeat, do not just anybody blindly media money, especially when you're investing into the L estate, it is not worded. Always searched multiple properties and do a thorough research before finalizing one. As a prudent investor, if you keep in mind all these 13 points, you would award costly mistakes on you would award regretting it later. Gold is gold. Silver is bold. If you don't do ab diversification, you'll get clean bowled. Investing into precious metal always acts as a hedge against an inflation. It always helps you to hedge against inflation. Inflation is the one who reduces the value of when you remember we covered this. Now you would ask, How do I invest into gold or precious metal? You can always invest by a commodit 7. Section 6: Financial Planner & Robo advisory: I'm so excited that you made it, Delia, by now you know, auto flying your finances, you know how to control your expenditure. They're all used to spend their all you shouldn't spend. You also know in case something happens, you can sustain your expenses for six ones. You also have seen viruses associated with reducing lessening product on penetration that could be in longer. He also look bags and some of the mistakes on some of the rules which are very important increases was no finance. We understood concepts in a very simple, if i tell, are not using lot of mathematical terms off on Mondays. No. Let me ask you a question. Do you really, really need a financial advisor? It totally depends on you. My using a financial adviser always looked for decertification. Financial planner should have, with certification like the most respected one issue either to certified financial planner , you should also do your due diligence. You should also look at commission that this bill I think they're charging you are really commission or they're charging you off. Pigs read. You're taking advisory on a commission basis. They will sell. Throw it up to you, which which is beneficial to them rather than which is beneficial to you and get some pigs coming. Fix it. What would happen is they are going to give you quality products because they know that the religious based on they cannot make anything about the tricks. Three. And in case if you make a good amount of money, you will continue with them. So that is the trust that you can build upon. Also always know, Porter, that Putin financial planners and advisors on my multi very important, very important. Ice Just again, it is very important. Nothing is free. Our plate. You would have heard of this term Doughboy advisory Is robot going to advise me on my investment? Well, Manning, then go totally saved me. No local advisory is basically it is no mobile neither It is an adviser. What exactly? And then the world misery. It is basically a Sadak programs which are programmed in such a manner that cat addresses and suggest we're pulling. This is your risk profile. How do they know Rs prepare and how this a desperate and that comes my wrist propellant McGary all my good. They do arrest profiling by asking you a series of questions. I question that understanding your rule by understanding the time arise in the risk appetite. They also create a portfolio that matches their dream on day. They also monitors the portfolio would do all the monitoring means supposed. If your portfolio is going very negative, Aniston stocks and are performing very well the Ankle Day that I decision a dry time without human intervention. They also look for an opportunity where in there is an opportunity to buy the by that there isn't a portion you to do. So they say it doesn't mean they are indulging doing already know their main purpose is to help you to reach your goal. The location is always as for the risk profile without human intervention, the weather. There is no book in that program that has been created. Now here is an example Off you Top word was reform. It is known as a better man that is best known for its services. But in Front, which is known for its newer processing fees, are little piece, then, always known for cool based investing. It depends on you if you want financial planner or you need a financial adviser or robo through planner. It is totally dependent on you. The implementation decide wonders. You're if you choose a little boy adviser. The decision is taken by the machine itself. But outside your program excel and the chances of errors are minimal. The cost is low, but in case if it is a normal, they put it one it could proved to be very costly. So please do your due diligence if we're getting into the world via video. 8. Section 7: Specific Goal Planning & Time Value: I'm not here to bore you with the mathematical function. Don't give you a management tips on how to make money. I will teach you small steps, but you can eight today so that you have your plan future and you achieve your goals. Whatever you have. Dem toe, big buying, a drinker or a dream home funding your child's education, marriage or saving for a diamond. I will help you with the step buster process for you to understand your current situation. Planet accordingly, see on on to reach your financial goals. So before we dive into it, it is understand few concepts. It's not boring. Concert present value present Well, you tells you how much money you need at present. Borrow on some off money you need now. Future value in turn tells you work would be the word off your investment in future. What is that big? Some that you want to read? Oh, you want 20 or safe for future? Let me explain a new T force to you on beauty. As you can see, the elected portion is cities off payment. Now what is Anne to do? I need to dio is a city's up even that is made at the beginning, off each period that is known as an you. Did you Regardless of your specific goal, we'll understand how we can put this to a practical use. We saw what this present value. We also saw what his future value on you did you. Now all you need to do is open this year by name, specific goal planning seat. And you need to click on any specific Well, let's start future value. So once I click on future value, it will take me to this sheet. Now, once you click on the link, it will take you to the specific sheet. You're the future Belushi. No. If I deposit 10,000 to an account earning 10% for you, how much will my deposit the world after five years? So what you need to do, you need to enter the value, will you? But within the backers. So I have already entered. All you need to do is enter value. Don't enter any symbol, sign anything. Enter the rate of unjust for example, 10% over you. What is the time that time which is given it is given up in so time is five years. Well, enter five, I'll click. Enter. Here is our value. So 16,105 0.10 dollars would be our value in future. No literate with this A bit the same. $10,000 is compounded monthly. No, I told you the power of compounding is very powerful. You would take 10% divided by 100. Well, you can just do 0.1. That is 10% divided by, Well, that just my new That might be a taking money because we first have to calculate for year. Then we'll calculate for five years. So what I've done is I've taken 10% divided. But well, it will give me my monthly rate of interest. That is 0.83 the number of years. So in this case, it is five years. So well, months multiplied by five years in 60. So islander 60 over you. It gives me a value off 16,453 0.9 Same thing which is getting compounded on Douillet Seem $10,000 which is getting compounded on, really gives me $16,105. Where is in value when compounded monthly gives me a value. We just closed toe Just close to $350 extra. Not the school. Great. That's the power of monthly compounding. So be understood, Waters. Future value. Now, in order to return to mean days, there are two ways to return. Either you can click on me and shit are the shortcut is to just look under turn. All right, so I'll click. Return. All you need to do is click on return. It will take you to the homepage. That is a mean shit. No letters. Look at present value. You want to reach a target amount right in click on present value to take me to present value. She? No. How much would I need to deposit today In an account earning 10% in order to accumulate 10,000 after five years. So what do we have? We have the rate of interest. That is I 10%. You have the time, Onda. We want to understand the value. The present value off $10,000 after five years, So we'll enter the value over you. $10,000 is a targeted gold silent or $10,000 again did in their bracket. I'll press enter. It will give me a value. 6209.21. Now, again, you. If they just was compounded monthly. What do you need to do? You know the magic trick. So all you need to do is 10% are zero born wine divided back. Well, that will give you the rate of interest for months. Okay, then you have to multiply. I'm a number of years. That is five years into 12 and give you 60. So the end, Peter, all the time here is 60. Just by compounding it monthly, you have to save less. Today, that is 6000 on $77.89 is it gives you an interest on a compounding monthly basis. That is, if you are getting interested in it and will basis off 10% you'll have to save 6209.21. Hope I'm Did you? If it is too heavy, just pause the video for a while. Take a coffee break, come back and will continue. I can see you now. You're looking refreshed. All right, let's let us head back to our home page. It just head back home. Yeah. No future value off annuity. I told you, what is an idiot is, as a result, regular payment. Right? So if I click on future value and you did, it will take me to the future value of an OTP. Know how much would I have in retirement account? If I deposit 2000 dollars, Eat your for 35 years on my own. 10% on my saving. So what we know you're is I have 2000 always be taken deported on a monthly basis For how long? For 35 years. So I'll enter 35 over you again. I'll enter the values within that bracket. 72,000. I'll enter the rate of industrial stand person so I would have a pretty off five lead 42,000 and 48 point $74 after 35 years. No, let's see. You are able to squeeze yourself and squeeze your expenses. Say more and you are able to say $4000 a month. So you what I'll do is I'll change the value from 2000 to 4000. I could have done it here itself, but it's better will do it simultaneously and enter the rate of unjust US 10 person. Come on, do it with me. Then what is the peered? What is the time? That is that 35 years. Well under 35 years. And click on Just press enter. Pardon me for changing the world. Click and press. You get 10 last 84,000 97.47 just by increasing the amount to $4000 per month. Now let's say you cannot see 2000 or $4000. Or maybe you're finding it difficult. You can just save, say, 166 points $67 monthly basis. So I lent to that value over you. It could be any value could type 150 or whatever you want. So let's say I'll just stick to this. I'll put in 100 and 66.67. That is amount, I can say for months. What is the rate of interest again? The rate of interest, how I told you before, this 10 person, so I'll take 0.1 that is equal to 0.1 divided by 12. Well, give me zero point. Yeah, three. I just have to multiply it by 100. So it will give me this value. That is 0.83 person music. Mood that recurring 3333 So you just round up to it. 0.80 You know how much time do we have? How did we arrive at 4 20 in order to arrive at 4 20 This pull out a calculator? Yeah, the calculator, will you? What? Didn't know that in a year? Direct well, months well pressed. Well, I multiplied by how many years do I have? 35 years. So it will give me a value of 420 while Inter 420 mind So you. So it would fit me six Last 7 32,085 points 66 just by depositing 166.67. So one thing is very clear that in case if you cannot save and really we can break down their savings in two months, he more on. We can achieve our dream. You saw there just by saving $166.67 we can achieve a goal off six last 32,007. It is explained 66. This is later decent sum. No funding your dream car or at least buy affordable, good quality house. Now, just by increasing the amount to $333.32 at the same rate of interest for food 20 months, you would be able to double the amount. Quite interesting date. Let's head back to our main page. There are a lot of exciting things. I no. Now remember this school relation Venable. There's a payment which is to be made at the beginning off the month. It is always on you. Did you and you? Do you syriza payment whenever there is a payment that needs to be made are the beginning of the month that is always on you. To do that is always and you did you, so I'll click on future value off. And you, did you How much would I have in my retirement account if I deposit 2000 and the big thing off each year for 35 years on own 10% on my savings? More about $4000? Or do I have I have the value? Will you? I'll ended a value 2000 island of the interest rate as 10% Linda and as 35 because 35 years is the time that we have. So they $2000 would become five night, 96,253 61 Quite impressive date save. If you increase the value to 4000 same value will become leaven Last 92,507 40000.22 You now considering previous example, etc. I mean the same deposit off $166.67 on $333.33. So island, $166.67. The rate of interest again, 10% divided by 12. That will give me 0.83 person for 20 is the month that I just showed you how to calculate. That is still in 2 35 years. Give you 4 20 months. So this is the value. But you will get now the 60 next 38,000 0 58.88 on considering the example of $133.33 will be ableto make about lattes. 49,000 0 $89.82 That is quite impressive, son. Just scroll back and let's return to our main page. Let's let's return to a main pitch were already on the main page. We're just checking if you are attentive or not. Now we're back to our original position. Are there is no peace? I'm in. Okay now present value. Off duty. How much will I get on my loan? Yeh My Now the question that How much can I borrow if I can pay an excellent but looking on the present value of the an UTI So jawiya, How much could I have? Four. For a home off any off your dream if you can make a monthly payment off, said $12,000 per year for five years at eight person, so five years would be how much five years would be 60 months, so you'll enter the Peter there 16 months. What is the amount? It is $20,000 for months old. Enter 12,000 over you again. The bracket. The rate of interest is a person's well into a person I can borrow up to one, like 48,518 $10.62. Now, what if you can make a monthly payment off? Only about $1000. So if you make a monthly payment of $1000 for five years, So I lent her 1000. Hi. How did that come across the 0.67? Just open your calculator on Enter the Value. Yours, Michael Polluter. What I'll do is I rest it as an interest rate divided by 12 months. That would give me syrup on 66666 So, any value the time rule is any value, it is a bow five. So you'll round off to next digit that this year it is six. So you take seven next, 10167 You can see you. So I've entered up was Entity A 0.67 I'll enter the time. 60 months and I could only borrow about 49,318 $0.43. What is you wanted to know what would be your monthly payment on a $20,000 car loan for five years at 8%. So we have what is amount you need. You need $20,000 so you enter 20,000 over a year within the backwards. Just need planted the number I mean that it of interest because it is calculated on monthly basis. So you divide it. Divided by 12 would give you a value 0.67 So I lent a 0.67%. What is the pier which have the time that you have is five years so five into 12 that were 60. So my monthly payment on a 20,000 would be $405.91. So under 20,000. No, look our loan I pay close to ₹4000 extra on interest. If you want to know the exact amount just pull out your calculator. Entered your total. Here might That is 40 if I am Aiso monthly payment who? 5.91. Multiply about number off payments. You'll be doing that 16 months. So your original principal waas 20,000 on you end up being 24,354 0.6. Let's return to a home in Click Ritter we direct our whole beach. No present value off a new T. Do let us look at some interesting examples. How much? Who that Ah four. For whom? If I didn't make a monthly payment, not monthly payment. Your let's look at amble payment off 12,004 year for five years at 8% on. If I make a monthly payment of 1000 letters, look at both of this problem, so I'll enter 20,000. This is the annual payment which I'll be making still make you enter. 12,000 will enter the rate of interest relented a period as 60 since it's five years, so you could borrow one lacks $60,400. If you can afford to pay a monthly off, $1000 will enter the value over you again. Since the rate of interest is on a monthly basis. Here, the rate of interest was on an annual basis. See, because you're making an annual payment off 12,000. All right, so you're if it is on monthly basis, planters it upon 67%. That is it divided by well, it will give you 0.67 That is a person. State interest for months. Number off months. It is 60. So it would be 49,647 $0.22. What if I wanted to know my monthly payment would be $20 car loan or five years at ST of interest or a person? So what I'll do is I'll 20,000. Alan did a reduction just again over you. Peter has five years, so five years would be in months because the other you can see it is showing monthly. So it's 60 months, so it would be 40.84 Now let's head back to our home page. That is main ship. And look at one interesting problem and buying this up unequal cash flow. Then name floor cash flow is very regular, our uncertain. So they just look at the problems. How much I must deposit today to receive. I'm dig, you know, you 202nd year, 330 year, 440 year and so on. If I on 10% on my deposit. So what do you need to do on only 100 in first year? I need to wonder in second year. I need 300 in 30 years and it $400 in four years. Now do this. If you click on this, it is a 10 person. So I put in the future value formula. Don't bother about the formula. You get confused. Just enter the interest rate, will you? Whatever interest rate it is. So let's say instead of 10% let's say if it is a person, you just enter it and press center. It will automatically calculate the value, so you need to deposit 92 points of denying far enough. Last year. 2nd 171 point what this has been dissident amount that you need to deposit in order to plan for you fools that you receive a recurring income. This is very useful for self employed or people who haven't unregulated stream off income. So I just I like this. You just need Clinton values in this field. Please do not change any other field. So the present value off unequal cash flow is 796.3 little dollars. No. What would win my bank account be war if I deposit 100 in first year. $200 in second year, $300 in $3400 for you if we because it on stent person did about user, will you? I'm highlighting it. The doctor doesn't stand person, so leave it out. Stay in person. Your bank account would be worth 1263.39. 9. Section 8: Credit Loan Facilities: no letters. Understand water credits facilities. The fundamental difference between a saving on a credit facility is that in credit facility , you take a loan from somebody else, maybe a bank or credit do near no non banking financial companies. The credit facility could be informal friend of order and education loan, personal loan, car loan or mortgage loan. No letters lookers some of the unique, important features that need to be kept in mind before availing this type of loan. So, in case of home loan, regardless of wherever you're based, you need to put in a 10 to 20% off the amount from your pocket. That is, in case before ho is worth, say, hypothetically, $100 you'll have to keep aside. Been are $20 from your pocket before you can approach for a home loan. We should also consider radius regular expenses and out goal while taking home room. There would be some fees, finance charges or extra hospital associated with it. Just keep that in mind. Always take a loan from a recruited bank or unknown banking financial company. Please read the details. See structure on the charges, which is the chair there always do your due diligence. Always read those fine prints. Education is the most precious thing that you would like for yourself in your wealth, kitty as well as you would like to pass on that legacy of education to your Children. So you would always want you to learn toe good love. I really college or maybe a bigger college or school. But it also comes with a bigger cost. So while considering education also considered various other things, it will help you in planning a personal finance like considered a band scholarship friendship with most of the universities give so you money for display nted to 30%. It saves 20 to 30% off your cost. Also, while evaluating the educational, always consider the cost which unassociated it always consider the cost. Always know one thing in mind that whenever you are taking an educational, there is also a guarantor which is required toe endorse inside that in case something happens, I guarantee that I will repay the room. That is the hard fact I want to remember. Not all the institute insist on this was many of the institute or financing companies or banks were always take a guarantee. Remember, One thing you always enjoy. Ah, Holiday. Right. The interest holiday is the Peter there. You don't have to pay any interest, But once you start earning the end months of the year, my start the charge, you or you'd some miss literally means are very used. Um, technically, this call bomb means the interest rate, plus the principal amount is huge. That you have to dp I would suggest an alternate option. That choice is up to you. You can consider some vocational courses that will give you on job skills. Or consider the learning or an online learning Most of the universities today or for ah, full flesh program online or combined institution. That would be a cheaper alternative. And it gives you a flexibility unless it has the same regal which is there. You have been going to the same rigour ripe till date With me you have back this lot off exercise you have done. No, don't exercise with me. You've learned Noticed concept the company, the complex of complex concept in a simplest manner. I thank you for dive credit. God, I remember having multiple card is not like having multiple girlfriends Pardon me for that . Don't take my people credit card, Tom. Rule number one All these limited or temptation while you're spending because this temptation is very, very expensive, if possible, always, I would suggest take a prepaid card. Now, let me explain you. What is a prepaid card? Suppose on a credit card. I get a limit of $10,000. All right, so let's say I wanted $10,000 credit card. What I would do is I would go to a bank. I will place a deposit on, say, $15,000 and I'll tell them against this 15,000 deposit. Give me a prepaid credit. God work $10,000 limit now, what it would do if you create a psychological effect for impact on your mind that I don't have to spend beyond 10,000 because my deposit is it is at stake. That's how you will control your spending on your temptation to spend less on your credit card. Always take credit card from a secure channel and always keep your credit card. It is safe and secure. No bank, no financial institution credit. You know anybody in the world except the Forster and the one who is in love with your money , I would ask you for you one time password that is the core, which you punching or the expired. He did are the cvv number, which is printed on the front or on the rivers off the credit card that is between 4 to 6 digit number. Neighbor share that, if possible, put a sticker on it remote only while you're using it online, not at the marketplace. This is how you could be safe using a credit card. Now there's an interesting room. You see what is rulers 30%. Always keep your credit card limit. You said below 30% by because if you're using your credit limit beyond 30% most of the financial institution bands Credit Union was lended. That carried guard would think that you are worth spending. Andre will start reducing your credit school. This is the harsh reality. Please keep that in mind. So if I have a $10,000 credit card, I would ideally not spend more than $3000 on my credit card. That is 30% off $10,000. If you want to maintain a decent credit history please remember the rule? All 30 person by hard it there is another awesome rule known as rule off. No person, no. Let me explain you the map behind the two person. The minimum amount. Do it. We started at the beginning of the calls. So millions amount due is the amount that you pay to your credit card instead of paying your total outstanding total outstanding year means the total bitch on a credit card. For example, let's assume that you have $1000 or standing on your credit card. That is the amount that you have to pay that this total amount Do that. You have to pay to your credit card company or bank, and you decide. Oh, I should just be the minimum amount you off say $40 is the bank discharge. Let's look pretty cheap on the pocket, Trey. But easy. Now, let me explain. In the mad be ended. They always charge a 2% off your total value. That could be close to 10% percent off your total value. They'll charge you as a minimum amount you so out of this for $2.10 dollars would be for your outstanding among that is from $1000 off your stunning credit, which is there. They just did that $10 towards the principle on $30 towards the interest and finance charge . $30 they're taking every month for interest in finance charges. I would request you to pause this video for a while, open your calculator and this calculated amount. So if I just calculate $30 into 60 months, that is five years I end up being 1800. Was the interesting financials? Yes, my $1000.30 dollars towards my interest in finance charges multiplied by safe. I guess I've been paying this so vile calculate it by 16 30 16 months. So that comes to 1800 dollars that I'm being as finance charge or interest charge. It's an eye opener, plus the $1000 that is $2800. I'm being on an outstanding amount off 1000. That's why you know, bangs are much ritual on much intelligent, and you are don't feel offended. But that is the hard reality because you don't know the rule of two person. Now that you know the rule of two person, I'm sure you would be very careful and diligent enough to clear your total outstanding. Denver. Who's I will teach you not to be a credit card, if older, all this sign of foreign auto debit or to live it as an instruction wearing every month when my credit card bills originated, you directly take money from my account. Who are the total payment? You please do not sign up for a balanced on so balance transforming. Suppose I have a car off a Citibank and I have a card off American Express. So what I'll do? I would rather not do transform, say, my old standing off $30,000 to my American Express card. It is a new car. Gilbert. Transferring your my liability doesn't reduce inside. I have beard extra for transferring it. They interest part. I peed. I would end up paying more yes by transferring my amount. Who other bank in credit card Always compare that credit card features using some of the popular website like bank bazaar dot com or bankrate dot com, or any other popular website that I put in a van. You will come to know the fees, charges and features which are there. Always pay your dues. Please do not withdraw cash. Please know. Take charge. Base car by no chance card because Charles car gives you off flexibility to spend unlimited . But that is not good, right? So don't buy. I don't take charge card. She was fixed interest rate card rather than a floating the interest rate card. If possible, try to lower your annual fees or try to take a credit card, which has no animal fees or did. The guard has an annual fees. If you spend is good enough to set off that angle fees. I reward points of the loyalty programs, which means they have. Please check your statements regularly. They pulled fraudulent transactions immediately on. Please block your card for international transactions on Listen until you want somebody else to use your money in some other country, please, no it for an international translation. You can do it from your neck banking or your Internet banking. You can do it some people by lap. We'll feel buying as well in days. If you don't understand this, just call up your bank and tell them that you want to block it for international transaction, you can activate it. Where is and when you need it. So this solid bones will help you not to be a credit card default. Some of their deadly mistake you make on your credit card is Remember this on. Do not boo. Never lend your credit card toe anybody. I mean anybody. It doesn't mean that you don't lend your credit card to your spouse. Because if you're lending your credit card to your spouse ensure that you have restricted the spending limit, you can do it virtually. Or you can call up your bank and tell that to reduce my car limit. All right, bank will never, never, never ask you for your details. Repeat bank will never ask you for your credit card details. Please do not take your my own credit card. That is much more expensive. So please do not sign up for your my own credit card Just to make you aware on a relic are you spend being them 28 to 49 person on will interest rate When you take a year? My own a credit card on this guys are very, very, very, very smart. They charge you monthly compounding, interested on an annualized basis. So imagine what Do the condom off money that you're being pour on display, taking your my own your credit card, please. Nor withdraw cash from credit card. If you could go Castorama credit card. You end up paying cash withdrawals. Charges end up being interest charges. You end up ing extra cash withdrawal fees. That is very, very expensive. So do not withdraw cash. Using your credit card. Always check your statement. Compare your statement to the last month on. Check your statement for irregularities and if he's which are living anything, which is there comes to your suspicion immediately deported by a phone call or via email. Do your bank always read the DNC? That is the terms and condition Before signing up for any credit card, you can award deadly mistakes if you follow this. Now, my question to us. Is it wise to take a personal loan or home loan or mortgage? Noon. It depends on two things. One is the rate of interest. The rate of interest on person alone is eggs. I it's very high. The rate of interest on person alone is very high, Plus you don't get any tax deduction or tax benefit while taking a personal loan because it is a country as a part off your income. Why it is a countered because that is something that you would spend anyways, whatever you want. Course in case of mortgage loan or home loan, the other tax benefit, which you get by purchasing your force well less the interest rate is choir decent. When it compared to personal, a personal loan would be available to you at the rate of 12% to 18% whereas ah, home loan or mortgage loan would be a level and headed off it person to 9.5 person. I mean, some countries even had 4% or 2%. You don't always wise to Diego home no, rather than a personal. Is it wise to buy a brand new CA while buying a brand new car? Please remember that there is a deposition Mr. Deliver decreasing value off your car off by approximately 20% every year, so $100 car will become zero value after five years. Zero value means the lifetime off a car is over after five years, now does that assumption. That's why there is a position which is their own car. So all of this considered the depreciation value while buying a new car. The value loses over time, so the used car also would give you the same experience. If it is maintained well on would be a level at a cheaper. I didn't going going for a new car. 10. Section 9: Learn to be a Rock Star Expense Planner: 122 easy days to see much more. All I need you to do is open the magical, small, stable existed. You can do it by yourself or you can see out of my practical experience. I've listed out those 220 12 times there in you spend a lot of money against Golden. I have completed my seat, so I'll just give you a brief background. What you need to do is enter the number off unit that number off times you used that product a number of times you buy that product, for example, newspapers. So I have entered 60 because I use extreme newspaper in a month. The cost is about 7.52 piece for newspaper, so total in a month is ₹460. Lifers are calculated for On off this all you need to do is it just need to interpret this to values number off times and it will automatically calculate the total in a man. Let me show you an example. Let's say I use 80 news people and it cost me ₹8 so it will automatically calculate the deep ocean at this total in a month so total in one year it would be 7680 in five years it will be 38,400 in 10 years ago the 76,800 in 25 years. It would be my last 92,000. So I've also given you a comparison. She so if you had invested for one year, the same 6 40 would have become 6 80 If you would have invested for five years, it would have become 43,000 for 10 years. It would have become It is extensive. And for 25 years it would have become to live 15,000. This is just a small expenses on the news people. Likewise, I've given you 122 really use things there. Used Endo spending money which are not required. Actually, they're of use alternative to it. Please complete this seat at your comfort. I'm check it by yourself. How much you're saving? You know, you're so I've completed this. She monthly egg unnecessarily spent close to ₹88,000. That's a quite a lot of expenses right on in a york, most to four left ₹4000. I just end up spending. As for my calculation in one years time, if I've invested the same amount, it would fetch me this much on my good elixir nature. I could have made this. You can come. You can play this excel and trust me. You'll find it the most useful tool on best place to save expenses, and you will not realize how much money, how much wealthier. Creating, yes, buy curtailing or stopping this expenses. This is our top 15 things where you should stop or a word spending money on. That is laughter and coffee. And I didn't men that you don't drink off your lati. Instead, have a machine fast food, extended warranties, subscription fees that you pay to the your bank your mobile later reviews online shopping cheap are doing by insurance in a small parts, like buying a help line at one go, then buying in an accidental cover on another buying ah political critical in lesser plan by one comprehensive plan, which covers all so that it would save costs as well. Do no waste a dime on weight loss program on lottery tickets, gambling, buying a property if possible, dissect all 15 things that is just open spending money on if you want to be financially independent. 11. Section 10 Cash Course on Credit Rating, Credit Score & Credit Report: Why is that the credit scores so important? Because whenever you are applying for a loan, the credit school district, you get in advantage over others. When it comes to interest rate, you get a better access to credit and get a better paying job or opportunities. If your credit score is good now there are released Reddit rating agencies across the ball . The popular one is stable in India and fickle in us because loners fair I said Company, which releases the school. There are various other credit rating agencies across the world. The difference between a credit report on a credit score is very important for you to understand. Credit score is basically a numerical value or school that is assigned to you. This don't be this factors Credit report is a comprehensive report off your credit history . Very bored. What you board Well, have you before Did where have you made the payment properly? Everything comes under your credit report All the bank accounts. We hold all the red carcel. It comes under the credit report Credit school range 8 50 of the high school to give you a similar and ology. It is like a scoring a plus in your school card. I've also in 50 is the best school where you get off higher than the rate of interest, which is offered to a person having a press corps that is 80. School 7 20 n 6 75 is a decent school. You still have access to credit, but the rate of injustice on the highest side below 6 50 school is considered a poor school or as an f grade or secret in your scorecard. It is very risky from a viewpoint off Linda, because 6 75 is like your junk bond. Don't compare yourself with the junk. I'm just giving you an analogy. 6 75 is continued as it was cool because the chances off before or repaying bath. The money is slightly lower and the reader printers is higher, and access to the facility is not that great. All the default bankruptcy, everything falls under a school, which is below 675. It is more or less universally standard across the world. Now. What kind of information do this? Credit rating agencies or bureaus collect the collective financial information all your timely pieman, your Defour's your bankruptcy, your bank down your credit card. Use outstanding your loan and everything comes into the financial part. The non financial prospects includes a certain aspect, like paying your utility bills on time. Have you defaulted on any mandatory payments? Attacks, payment and everything comes under non financial. To put it in a simplest form, Financial is all things that has to do with money. The information is collected by this credit agencies or credit bureaus. Non financial is everything which is unrelated to money. It is more to an individual or to a person. One question that would be bobbing your office. Why is the credit school so important? If you want? Oh, a real, A credit facility or loon? It is important. If you want to see our desire to have a lower rate of interest, then it is important for a better credit and access to credit facility. Your credit score is important. Hire the very school, but like better, the great better is the access to credit. Even now, After and two level midlevel and high low Hammond level position the check your credit school. What, what, what is before giving your job before How long does my credit History is, too. There is no certain timeline or a number of years. A credit history is tour by a credit rating agency or a credit bureau, but I really distorted for about 5 to 10 years. Certain credit rating agencies tour information for a longer period and also the ambition it by other country. For example, if you have defaulted in one country, and if you move to a New York country or a new place, obviously there would be always be a background check. The information can be shared by the credit rating agencies are credit bureaus. You can get the A copy of your credit report by a call means fire, phone call or from the official website. Like in India, you can go to an official website are stable and Uganda Lord, by being a minor fee, Please do not go to places where you find free credit. Report. Nothing is free. Your personally trails and it I've bean used on your details can be compromised. This sold for 5 $10 to cybercriminals. You can also request your credit report by email. Some credit bureaus allows. Ideally, what I would suggest is go to their official website on request for really pulled. Also remember, as I told you, there is no free credit report or school, so be mindful off it. No se Things are not good on your credit. History has not been good. How you can repair your credit is key. You can take help of experts were there they're loners that it it's really pair export. They will guide you step by step. Please do not borrow too much. Don't do a balance transfer for Don't default any payment. Check your credit history Credit report for easy irregularities in data any other irregularities or suspicious account or card that is affecting our child. That is reflecting. Please inform your credit bureau. It is quite possible that the person having the same name or same data board would have was we'll have the same credit school are accredited pool. There are high chances are better, so always check and report. If any irregularities found, limit your credit card that is, have a minimum number of great cars. Maybe one or two is at the max is good. In order to control your credit, don't fall in love it on secure cards. Instead, fall in love with secure cards. Example which I gave you the credit card against your fixed deposit or certificate of deposit that somebody choice. Get in. I don't God, if possible, limit that I don't guard. Also, in case if you're giving it, I don't card too well. Kids. It is always have been been situation because you know where they're spending, and you'll also have a control over the expenditure because ultimately you will be the one who will be paying the bill as far as possible. Keep your credit card limit as low as possible and also remember that well off 30%. 12. Section 11: Ten Pro Tips & Apps/Tools: please memorize this. Never buy an answer, which is the Christianity, or the position means loss off value over time. Let's say you bought something for $10 after one year. The valued appreciates by 20%. That is the value appreciates 28 game. Likewise, the value depreciates as a year passes, it continues till the value become zero as the lifespan off the Assert order product, which aboard is forward? This especially more traveling in case of car. Now what you can do is once the value has the procedure, either you can sell it donated or you can repair it and keep it for a very, very long time. In case if you can hold, we'll say about 30 years. Then it becomes have been page car where no one else could. When that car only you have. That's why accepting taste car and when they Scott also has a lot of the man, but you should have that patients to hold for 30 40 years, track your influence and our clothes. You have done multiple exercises. Please take your influence. That didn't income as well as expenditure. Joining the 20% club that is saved 20% off your income first, then lying your expenditure don't make financial decision basis. The emotion we have seen this in we have seen this while we have started behavioral finance . Always remember no one gets which without a Ford and book always read the fine plane. Remember the rule of six off keeping the emergency fund, but that we have calculated manually Also, we have checked in our personal, but I'm still planning. Also, we have checked that in personal master financial planning. But we planned our goal. I understand the game just going jump in tow again without understanding the money. End game Beeman Illiterate. Keep yourself updated. Read, Learn, Enrol for courses Understand new things about money. Just don't gamble. Also, build and create a safe or residue income Stree. Burying you should not only depend on your main source of income, you should also creates that in constant there in you get a recurring income. Well, in my left one hand, you have to reduce your recurring expenses. Using the money saving tips, Mitchell gave you another hand. You have to create a passive income stream. So please member is this 10 through money tips to manage their personal finances well, there are some of the important and trusted financial or money app or software tools that are available, some of free. It is both every live alone android as well as I always cooking is that it's known for its budget investment in taxes. It does the heavy lifting for you. Then there is it evil that gives you tips and tricks on investments, personal finance, another stuff. It gives you various case studies that you could lead on in stern. Then, if you need to know about your budget, then there is a wonderful app known as you need ah budget. But it is specialized for loans and credit loans, credit cards and stuff and a credit facilities. It will show you where you're spending your money, how you can control it. Stars gives you measured, wanted or duck session, but and there are a few other acts like too low it will give you in the literal excess sheet. There are three answers will make meant my my cams for investment in mutual funds. Tycoon is personal finance form basically freelances like you and me and many other people chime in light of your bandit on it doesn't have any student fees. Everything is transparent. This is a lot of them trusted abs that you can use in the resource section. I have included the official ing but then you can go eat and explore about this. It will look something like this. Have Leicester down all the acts as well. Is there official that site enjoy exploring.