Start Saving!

Start Saving!
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It doesn't matter whether you make a return of 2 percent, 10 percent or even 100 percent on your investments if you have nothing to invest!

So the first logical step is to start saving money to invest.

This might sound as dumb, but many people including myself had to go through a phase where we spend a lot of time thinking, reading books, blogs, watching videos about investing techniques, tips, and tricks. While we have very little to no funds to start investing with.

As there's a saying which goes,

Little by little you can safely stock up a small reserve of money, but not until you start.

Let's say you wanna retire after 30 years and what matters at end of 30 years is NOT what returns you got, what matters is the net worth of your portfolio. It doesn't matter if you put that money from your pocket or the market rewarded, end of the day what are you left with! That's what matters when you want to retire or achieve financial freedom at any age.

Here are a few simple tips:
  • Start saving early, start saving small (500 rupees per month will do the trick)
  • Stop using credit cards (unless for medical or critical emergencies)
  • Get a TERM life insurance
  • Must have a decent health insurance for you and your family
  • Utilize Company Benefits (for salaried citizens)
    • Company sponsored Telephone
    • Company sponsored Internet
    • Company Leased Car
    • Daily Travel Allowance
  • Fix your taxes - avail as many benefits as Govt. allows you to save taxes
    • Health Insurance (for you and your family - TOP PRIORITY)
    • TERM Life Insurance
    • ELSS Mutual Funds (think of this as one of your retirement funds)
    • Home Loan (save on both interest and principal paid to the bank)
    • Education Loan
    • PPF
    • National Pension Scheme (Not recommended)
    • Leave Travel Allowance (Save if you've spent on travel, don't spend to save!)
    • Donations (If you want to donate, you can avail tax break on it too)

I want to end with a bonus tip which is a bit easier to say but difficult to follow:

Pay yourself first!

What it means is that, figure out an amount of money you want to save every month. Make this saving a priority by transferring it to appropriate account (savings or mutual fund, etc.) as soon as you get your salary at the beginning of the month.

Other things will automatically fall into place when you do this. You will end up planning expenses to fit inside your budget, sometimes you might be forced to cut down on a few luxuries.

As I said, this is easier said than followed, but it is worth giving a try.

Please feel free to share your thoughts and ideas in the comment section below.

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