The Golden Rules of Money

Money – It is not just a piece of colorful paper with numbers on it. Money is what that is making the world to wake up and to go to bed. Money is what every individual is after. But not everyone is successful in earning money or to grow the money that they have to make wealth. So, what is it that many people are missing out, yet some people are so good at? The rules are the same for everyone; whether one finds it easy or difficult, if people follow the basic rules given below, then everyone can sure see success in creating wealth.

Emergency fund

It is good to be positive in life. But that doesn’t mean that you should never think of worst-case situations. It is very important to be prepared for emergency situations. You should keep aside a sufficient amount as an emergency fund. This would come handy not only any medical emergencies but also in case you happen to lose your job. Apart from maintaining an emergency fund, it is equally important to have appropriate life insurance and medical insurance policies.

The plastic money cards

The plastic money that you have in your wallets in the form of credit cards and debit cards are helping you to spend money without actually touching it. When you count the paper currency by hand and spend it, you are definitely bound to be at least a little aware and cautious of your spending habits. However, with plastic cards, most times you tend to overspend. The important thing to keep in mind about using plastic cards is that you have to make sure to repay what you have borrowed in full. Your credit score rating falls down when you keep accumulating your loans that are borrowed through plastic cards without repaying in full. A good credit score is vital to avail loans in the future.

Start early

“Early bird gets the worm.” This quote can be applied to emphasize that you need to start saving and investing early in your life in order to attain your financial goals in life. It is recommended that you start saving and investing as soon as you start your first job and earn your first salary. When you save over a long period of time in the proper channel, your interest and principal gets compounded. The compounding power of money is more than what you may think. You can use mutual funds to save/ invest regularly and enjoy the power of compounding.

Don’t be afraid to take risks

No pain, no gain. Now that you have decided to start early in life to save/ invest, you should be ready to take some risks with your investment choices. Nothing wrong in playing safe; but you might also not be making high gains. Make use of normal bank savings account to save for short term financial needs as well as to secure your emergency fund as you might need to be able to access this quickly and easily. However, for long term financial goals take some risks and invest in options such as mutual funds. Only when you take some risks and stay invested over a long duration, you can create wealth and make your money earn money for you.


Never put all eggs in the same bag. Investment is all about the extensive research and more diversification. Since investments are for the long term, you can make high returns from it only when you put your money in a minimum of 3 to 4 different options. This is important because if one option (stock or fund) is not doing well, then the other options will compensate for that loss. Once again, when you invest in mutual funds you spread your money through various different investments.

Retirement corpus

Like an emergency fund, saving for your retirement is another most important and inevitable financial decision you will have to make. Never keep this as your last priority thinking that you have enough time to save for it. It is not only crucial to start early for building a decent retirement corpus, but you should also ensure not to dig from your retirement corpus to feed any other financial obligation in life. Like all other financial goals such as your children’s education and marriage, your retirement corpus is also equally important.

Know your assets and liabilities

Simply put, assets bring in money, but liabilities take away money. So, you should always see to it that you have minimum liabilities and more assets. You can also find ways to convert your liabilities into assets. Minimize spending more on luxury automobiles and bigger house as these will incur more costs in the future for maintenance and you will gain financially nothing from those. Rather, save that money and invest in another property that you can rent/ lease out to as this will bring in more money.

To summarize, start early and strictly stick to your financial goals. Do not cut short on goal to feed the other. Keep yourself updated with the latest saving and investment tools. If you are not sure of how and where to invest or if you think you do not have the time to do the needed research before investing, it is always good to seek help from a professional. So, get in touch with your financial consultant and set your financial goals to keep going on the right track.

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About the Author: Maithreyi

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