1. Buy Term Insurance - maybe 20x your CTC/yearly income
The rule is that money when placed in a deposit, should provide the same annual income via interest. (1/20 = 5% which is roughly the long term Fixed Deposit rate)
2. Buy adequate health insurance
Have a top up feature and pre and post hospitalisation cash reimbursement
3. Have a diversified portfolio but give 50% weightage to your major convictions.
If you are new to investment, please avoid penny stocks and stick to Bluechips or Index ETFs.
4. Don't overspend on credit cards - they are weapons on mass destruction if not used wisely.
5. Transfer 5%/10% of your salary to a separate account and treat it as emergency fund
One should ideally have 6 months salary in liquid fund
6. Plan your taxes - Invest wisely and get all deductions if you are salaried
7. Don't overspend (everyone should save at least 15% of their take home salary)
Rule of 15 - If you invest 15k every month for 15 years at 15% returns, it will yield 1 crore.
More surprisingly, if the exercise is continued for 30 years, it yields 10 crore. That is the power of compounding.
8. Plan your investments - have a balance amount of equity/debt/alternate investments
9. Have a nominee for all your accounts and a will in case you are married
10. Discuss your investment plan with spouse/family
Goals decide the investments and not the other way around
“People who live below their means enjoy the freedom, which people busy upgrading their life style cant even fathom!” - Naval Ravikant
This book on Naval Ravikant, changed our perspective. Try it out here.
Just what I was looking for. Thanks.