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Young professionals out there, manage your money. Its not difficult, its just that you were never taught the how.
Financial education is almost non existent in India. You don’t need any financial adviser to help you, if you are able to find a job you are intelligent enough to manage your monies. Anyway, most financial planners are only concerned about their commission and not your finances.
Here are a few basic pointers.
1. Save 50% of your salary. – no fancy gadgets or designer wear for you, if you really want them, buy them with returns on your investments and not from your salary.
2. Start with the Public Provident Fund (PPF) account and max it out every year ( Rs.70k a year). Whats more, you even get tax exemption on the money you put in it. For more information see this link [ Open a PPF account in 11 easy steps ].
3. Start an SIP with the remaining amount in a large cap mutual fund like HDFC Growth, Reliance Growth.
4. Any bonus you receive, spend 50% and invest the rest in stocks – large caps mind you not the hot tips from friends.
5. Avoid trading in stocks, if you are the adventurous type and can’t resist trading then put aside 10-15% of your bonus and only trade with that. If you lose that [you eventually will  ], don’t reallocate from other investments. Trading is gambling, hard to resist, better not to start at all.
6. And lastly don’t buy insurance [ read my other post: How to calculate your life insurance cover ] unless you have some liability that you pass on to someone incase of any eventuality.
I’m sure you have a lot to add to this list. Please do so in the comments below and help others in planning their finances.
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About Naveen
Naveen is a software geek, avid reader, car & bike enthusiast and a Man United fan. He likes to code and sometimes blog. He also likes music, going on long drives and enjoying movies.
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