Best Personal Finance And Investment Advice For Beginners | My Personal Finance & Investment Strategies

One of the biggest misconceptions among us is that investment is only a thing for rich people. But today this is very far from reality. The reality is that you can start investing with a minimal amount of money (As low as Rs.500). But the question is why is personal finance planning important? The answer is ‘inflation’ which is causing a rapid increase in our daily essentials, and investment would be your most powerful weapon to combat it. 

If you invest early and regularly, you will get plenty of time to increase it. Therefore, it is important to start personal finance planning early. But there are several good investment options available which make it somewhat difficult for investors (especially beginners) to find the best and safe investment options

So if you are about to start your investment journey, this article will be helpful for you. Here I will discuss, ‘what is personal finance planning?’ ‘how to start planning personal finance strategies?’ And ‘How do you manage your expenses?’ Let’s start with earning first. 

How to start earning?

Just as you need money to make investments, you need to have some special skill sets that will help your resume to stand out from others. But what new skill should I learn? To make things easier for you, here is a list of some of the top skills to learn now. 

  • Copywriting:

There is an old saying that writing does not pay for bills. Well, this is not essentially true for sales copywriting. If you have the ability to produce creative writing, copywriting would be a profitable skill to learn for you. You just need to have a laptop/desktop, a good internet connection, and your creative ideas and you are good to go. 

  • Sales skills:

If you consider starting salary and commission earning potentials, sales jobs are among the highest. You just have to have some necessary sales skills, and industry-specific knowledge, and you can become a good salesperson. There are numerous sales job opportunities available in the market like – IT sales, medical sales, media/advertising sales, export sales, etc.

  • Graphics designing:

If you are one of those who want to work as a freelancer, then Graphics designing would be the best skill to learn for you. As everything is becoming digital and people are rushing towards social media, the demands for graphics designers are also increasing. 

  • Video filming and editing:

Studies show that every minute five hundred hours worth of videos are uploaded to youtube. That means people are greatly moving towards video content, and it opens a new job option for us which is video filming and editing. Many big YouTubers need to have their own filming and editing crew to stay consistent. Also, if you have storytelling and acting skills, you can even start your own youtube channel.

  • Project management:

In recent times the demand for project managers has rapidly increased. The project management process is all about leading a team to achieve its goals within a specific time. Every company needs a group of steady leaders for the successful completion of their projects.

  • Forex trading:

Forex trading may appear to be a very complicated process at first glance. Nevertheless, if you can digest it properly, you will find it useful. Forex trading involves the exchange of currencies between two countries, so you need to have some adequate forex knowledge to earn from it.

  • Foreign language:

As globalization emerges, international business is also growing rapidly. But language can sometimes be a barrier. Fortunately, translators can help to remove that. 

Being a translator does not mean that you will only have to do verbal translations, there are also some written aspects as well. Proofreading, document translating, and editing are all different parts of this job.

  • Tech skills:

Tech skills are one of the most sought-after skills in the Internet era. Companies are increasingly relying on people with advanced tech skills as they migrate to cloud-based operations. 

Some of the most profitable tech skills to learn are – AI and machine learning, IT Automation, cloud computing, proactive security, fintech, parallel computing, quantum computing, etc. 

 

What are the best investment options?

Investment rules say that you should at least put 25% of your total income into investments. But what would be the best investment option? Let’s discuss that first.

There are different types of investment options available in the market, but which one would be the best investment option for you depends on your monthly income, your age, your investment risk tolerance, and your future goals. Here is the list of the best investment plans available in the market.

  • Stocks:

Stock market investment is one of the most popular investment options among experienced investors and traders. Share market investment is a double-edged sword that can make you rich as well as poor. You need to have a strategic investment plan and some patience to gain profit from stock investments. 

If you want to know more about the stock market and stock brokers, then make sure to go through our best stockbrokers list. Also, if you are looking for the best tech stocks to invest in, then you can find the list here

  • Fixed deposits:

If you are looking for the safest investment options available in the market, then investing in fixed deposits would be a smart investment option for you. It comes with reasonable interest rates and assured returns, so if your risk tolerance is very low then, fixed deposits would be the best investment plan for you.

Also, if you are looking for the best fixed deposit scheme to invest in then make sure to take a look at our best-fixed deposit schemes list. 

  • Mutual fund investment:

If you want to diversify your investment portfolio without taking the headache of managing them, then a mutual fund is a smart investment option for you. So, if you want to know, what is mutual fund investment, and how does it work? Then make sure to take a look at our best sip investment plans list.

  • Senior citizen savings schemes:

The government of India has introduced the Senior Citizen Savings Scheme (SCSS) to assist senior individuals to make savings for the future and earn quarterly interest. As of March 2022, you can start this senior citizen investment plan with just Rs.1000 with an interest rate of 7.4%.

  • Public provident funds:

Public Provident funds or ppf investment is one of the most popular investment schemes among investors with a ton of investor-friendly investment options. It is a long term investment scheme best suited for those who want a high return on investment and stability at the same time.

  • Cryptocurrency investment:

Cryptocurrencies are the most futuristic investment options in India. It is actually digital money backed by blockchain technology. You can invest in cryptos by using any cryptocurrency investment appAlso, if you want to know more about crypto investments then make sure to go through our best crypto coins list

  • Real estate:

If you are looking for a risk free investment option with long-term benefits, then real estate would be a great choice for you. Apart from offering a steady cash flow, real estate investment in India can offer you several tax benefits. One of the biggest advantages of real estate investment is that you can finance it through debit. 

A recent report by RBI shows that real estate prices have increased by 15.1% in major cities of India between 2011 and 2021. So if you are looking for a high return investment option, then it would be a great option for you.

  • Gold investment plan:

Gold is one of the safest and most popular investment options among Indians. Gold investment also features dual benefits, wealth creation, and reduction of risk. But gold jewelry is not the best investment plan. Because the price of gold jewelry also includes the making charges which will be deducted when you sell them.

That’s why it is always advised to invest in pure gold coins and pure gold bars. You can also make investments in gold bonds which will be equally beneficial as physical gold. 

There are a number of other investment options available in the market, but these are the options that we believe can offer you a better balance between risk and profit.

Things one must include in investment planning:

The above-mentioned are all about earning and personal finance planning process. But there are certain things that one should always keep in mind while planning personal finance strategy. 

  • Emergency fund:

An emergency fund is actually a lump sum amount of cash that should be kept aside to combat unexpected financial situations. 

For example, let’s assume a recession hits and you lose your job, the emergency fund would help you to survive until you find another job.

But the most important question is how much should we put in our emergency fund. The experts suggest that the amount in your emergency fund should be enough to bear the cost of your family for at least 12 months. Also if you keep your emergency fund in your savings account, ask your bank to turn on the auto sweep option, it will help you to earn higher interest from your savings. 

  • Life insurance coverage:

Having term insurance coverage is beneficial to anyone who is looking to provide their family with protection in case of an unexpected financial crisis. A team insurance plan can help you to pay medical bills, secure the future of your loved ones when you are not around, and provide medical care to your family when needed. In this way, you can consider insurance as investment for the future.

  • Term health insurance: Health term insurance is mainly designed to cover your extensive medical expenses caused by illness. There are two types of health insurance plans available, Medi claim plans (It pays off your hospital bills), and Critical illness coverage (It offers a lump sum payout if the policyholder is diagnosed with a terminal illness). 


  • Term insurance: Term plans are the purest form of life cover plan to have. With term insurance plans, you will get a policy period in exchange for a certain amount of premium. And if something bad happens to the policyholder during the term insurance coverage period, the nominee will get a lump sum payout to compensate for the loss. 


  • Accidental insurance coverage: With Accidental life insurance cover, the policyholder and his/her family get coverage against unforeseen events like accidental death, permanent total/partial disability caused by an accident, etc. during the insurance terms

However, this is just an overview of term plans and their benefits. But if you want to know more about life insurance plans, then go through our best-term insurance plans list

How do you manage your expenses?

Expense management is one of the first things to do before starting investments. Because if you can’t manage time and expenses, then you can never be able to be disciplined with your investments. 

But how can I manage expenses? There is a general investment rule that says you should keep 24% of your total monthly income for savings. The rest of the amount should be divided into 3 parts, 70% of it for your basic everyday needs, 10% for entertainment and other expenses, and 20% to learn new skills. You can apply this rule to make sure that you aren’t spending money unnecessarily, and also can maintain your monthly investment plan properly.

Final words: 

There is an old saying that says, if you save money, money will save you. Therefore it is very important to keep aside a good portion of your monthly income for your investment plan that is most likely to offer you good returns. These small yet regular investments will help you to achieve your goals in the future. 

One of the most common difficulties faced by young people is investment management because they don’t know when to save and when to spend. When you learn how to control these two aspects as a beginner, you will save money in the present and achieve your financial goals in the future.

FAQs on personal finance:

  • What do you mean by investment?

Investing is storing a part of your income for future capital formation rather than spending it on consumption. There are three different investment types available: stocks, bonds, and cash equivalents.

  • What are the 4 types of investments?

The 4 types of investment in India are – 

    • Equity: Like investment in stock market, mutual fund investments, PMS (Portfolio management services), and AIF (alternative investment funds)
    • Debt: Like bond investments, debentures, and investment in fixed deposits.
    • Liquid: Like treasury bills, commercial papers, etc.
    • Others: Like investment in gold and real estate.
  • What are investment banks?

Investment banks serve as intermediaries in large, complex financial transactions. IPOs and mergers between corporations are usually handled by investment banks when a startup company prepares to go public.

  • What is an investment banker?

Investment bankers combine financial services expertise, analytical ability, and persuasive communication skills to support institutional clients with capital raising and mergers and acquisitions.

  • How to become investment banker?

If you want to get an investment banker job, then you must have a bachelor’s or master’s degree in a related field. It is common for investment bankers to begin their careers as analysts and earn their CFA charters in order to do so.

  • What is foreign investment?

In foreign investment, companies or individuals from one country invest in the assets or ownership stakes of another country’s company. Foreign direct investment is becoming increasingly common because of increased globalization.

  • How to calculate return on investment?

The most common and widely followed return on investment formula is: return on investment Profit Cost of investment 100

  • How to start sip investment?

There are several online investment apps available like Paytm money, Groww, etc. that allows you to make sip investments very easily. Also if you want to know more about mutual funds investment, then make sure to check our best mutual funds list.

  • Why is expense management important?

A good expense management system will allow you to budget your expenses properly and avoid unnecessary expenditures. As a result, you can allocate your resources efficiently and keep your cash flow in check.

  • Who is Expense Manager?

The expense manager is software or an application used to keep track of your money inflows and outflows. It allows you to manage expense online and keep your cash flow under control.

Disclaimer: I am not a certified financial adviser and this is not financial advice. The purpose of this article is to inform you about financial products and strategies. Consult your financial advisor before making any investment decision.

 

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