I want to keep this one short & quick. I know this is a controversial topic but I just want to share my opinion.
Unfortunately school doesn’t teach us about money, and it’s a taboo subject for many people. However, eventually we all have to deal with earning & spending money.
To cut it short, here is what I think :
- I’ve always had the mindset to focus on earning more, rather than spending less/saving more. Focus on developing your active source of income.
- I believe that there is no point in fussing so much about money specially if that makes you start chasing discounts. There is no point in spending less on that coffee or using that coupon to save money. This won’t help you in the long run. After all, what are you earning all this money for?
- Money is the consequence of creating a value for people, hence focus on what you can do to generate more income, rather than focusing on how you can control your expenses & save more money. (I am not advocating against savings, they’re an essential part. I am talking about the mindset. More on that below)
- Of course it does not mean that you become completely reckless. What I am suggesting is that you stop creating that aura around money. Stop treating it as if it’s running your life. It’s not. You’re pulling the strings.
So should I stop saving money & go buy that lambo?
- No. As I mentioned before, saving is an essential part of this equation. But the focus ALWAYS, has to be on improving the flow of active income.
- Now I can share what I’ve personally started doing. I’ve kept a ceiling of ‘X’ amount of rupees that I always wish to have in my account as liquid cash. Anything above that, I invest.
Everyone has a different plan, this is just how I am currently investing as I don’t have a solid source of active income. Most people like to ‘save’ a percentage of their income & then invest it. Do what suits you best.
Where should you invest?
Well, that depends on the level of risk you’re willing to take & the amount of return you’re expecting. But if you give zero shits about what I am saying & you just want an answer, then i’ll give you a quick run down based on the risk involved.
High Risk – Start investing in the stock market, learn more about the equity market & make calculated investments after studying the company & their business properly.
Moderate Risk – If you still want to invest in the equity market, the safest bet for you would be to invest in Mutual Funds, more specifically ‘Index Funds’. You can start an SIP or invest lump sum.
Low Risk – After that if you still have certain savings or extra cash, keep them safe in a bank fixed deposit.
Lastly, I would like to leave you with this quote. Think about it 😉
“Money is a terrible master but an excellent servant.” —P.T. Barnum
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