Personal_finance

Managing personal finances is an essential life skill. To make informed decisions, it's helpful to follow simple, time-tested rules that serve as guidelines for financial planning, saving, and investing. Here are nine key personal finance rules you should know to secure your financial future: 1. Rule of 72 (Double Your Money) The Rule of 72 is a quick way to estimate how long it will take for your money to double with a fixed annual rate of return. Formula: 72 ÷ Interest Rate = Years to Double Example: If your investment earns 8% annually, your money will double in 72 ÷ 8 = 9 years . This rule emphasizes the importance of starting early to harness the power of compounding returns . 2. Rule of 70 (Inflation Impact) The Rule of 70 estimates how many years it will take for the purchasing power of your money to halve due to inflation. Formula: 70 ÷ Inflation Rate = Years to Halve Value Example: With a 5% annual inflation rate, ₹1,00,000 will only be worth ₹50,000 in 70 ÷ 5 = 14 year...

Here’s a list of financial instruments categorized by goals and their key features , perfect for goal-based investments: 1. Short-Term Goals (1-3 years) a) Savings Account Features : High liquidity, low risk, minimal returns (~3%-4%). Best For : Emergency funds, short-term expenses. b) Fixed Deposits (FDs) Features : Guaranteed returns (~5%-7%), flexible tenures, low risk. Best For : Travel plans, gadget purchases. c) Debt Mutual Funds Features : Moderate returns (~4%-7%), low volatility, tax-efficient for >3 years. Best For : Wealth preservation, planned expenses. 2. Medium-Term Goals (3-5 years) a) Recurring Deposits (RDs) Features : Fixed monthly contributions, guaranteed returns, low risk. Best For : Education funds, vehicle purchase. b) Balanced/Hybrid Mutual Funds Features : Mix of equity and debt, moderate risk, potential for 8%-10% returns. Best For : Saving for a down payment, business investments. c) Gold ETFs or Sovereign Gold Bonds (SGBs) Features : Hedge against inflat...

Goal-based investing is more than just accumulating wealth; it’s about using your resources to achieve specific life milestones. By aligning your investments with your aspirations, you create a clear, purposeful financial strategy tailored to your needs. What is Goal-Based Investing? Unlike traditional investing, which focuses on maximizing returns or beating market benchmarks, goal-based investing centers on personal financial objectives. Whether it’s buying a home, saving for a child’s education, or planning a dream vacation, this approach ensures that every investment has a purpose. The Goal-Based Investment Process 1. Identify and Prioritize Goals Start by listing your financial goals and categorizing them: Short-Term Goals (1-3 years): E.g., buying a car or building an emergency fund. Medium-Term Goals (3-7 years): E.g., planning a wedding or saving for a home down payment. Long-Term Goals (7+ years): E.g., retirement or funding your child’s higher education. Assign each goal ...