LET’S PLAY A FINANCIAL GAME

 

LET’S PLAY A FINANCIAL GAME


 

SUPPOSE YOU ARE  INVESTING RS 1000 EVERY YEAR INTO AN INDEX FUND FOR 5 YEARS

WHICH CONDITION WILL GIVE YOUR BETTER RETURNS

 

 

 CONDITION 1

1)    1)  THE INDEX STAYS AT RS 100 PER SHARE FOR THE FIRST YEAR.

2)      2) IT GOES DOWN TO RS 60 THE NEXT YEAR.

3)     3)  IT SAYS AT RS 60 THE THIRD YEAR.

4)    4)  THEN IN THE 4TH YEAR, IT SHOOTS UP TO RS 140

5)   5)   IN THE FIFTH YEAR, IT ENDS UP AT RS 100, THE SAME PLACE WHERE YOU STARTED.

CONDITION 2

1)    1)  THE INDEX IS AT RS 100 THE FIRST YEAR

2)     2)  RS 110 THE NEXT YEAR

3)    3)   RS 120 THE THIRD

4)    4)   RS 130 THE FOURTH

5)    5)   RS 140 THE FIFTH YEAR

SO, WHICH OPTION YOU WILL CHOOSE FOR MORE RETURNS?

 

 

I KNOW

MOST OF YOU WILL CHOOSE 2NDCONDITION FOR GOOD RETURNS.

 

COMPLETELY WRONG


 

TOTAL INVESTED MONEY IN 5 YEARS = RS 5000

IF YOU CHOOSE CONDITION 2

YOUR RS 5000 TURNS INTO RS 5915

IF YOU CHOOSE CONDITION 1

YOUR RS 5000 TURNS INTO RS 6048

CONDITION 1 WILL GIVE YOU MORE RETURNS THEN CONDITION 2 


 

IN CONDITION 1 :

EVEN AFTER 5 YEARS INDEX VALUE IS RS 100, NO GAINS. BUT THROUGH SIP YOU TAKE THE ADVANTAGE OF HIGH VOLATILITY.

IN CONDITION 2 :

WE CAN CLEARLY SEE, THAT 5 YEARS IS A PERIOD OF BULL MARKET SO, LUMPSUM WILL BE BETTER OPTION THEN SIP.

 

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HOW TO USE CREDIT CARD SMARTLY

HOW TO USE CREDIT CARD SMARTLY

1 PAY YOUR CREDIT CARD BILLS ON TIME

IF YOU PAY YOUR ENTIRE CREDIT CARD BILLS BEFORE DUE DATE, YOU DO NOT INCUR ANY INTEREST CHARGES.
BUT IF YOU FAILED TO PAY THE AMOUNT BEFORE THE DUE DATE, THEN YOU WILL BE PENALISED & CHARGED HEAVILY!!
ONLY SPEND ON CREDIT CARD, WHAT YOU THINK YOU CAN PAY LATER ON TIME.

2 DON’T SETTLE FOR MINIMUM PAYMENT
THERE IS A PROVISION TO PAY PARTIAL AMOUNT OF YOUR BILL, IF YOU CAN’T PAY FULL.
TO AVOID PENALTIES, YOU MUST PAY YOUR BILL ON TIME
BUT TO  AVOID HEAVY INTEREST RATES, YOU MUST ALSO PAY THE BILL IN FULL.
DON’T PAY ATTENTION TO THE MINIMUM DUES.

3 AVOID USING YOUR CARD AT THE ATM
CREDIT CARDS ALSO LET YOU WITHDRAW CASH FROM ATM’s
BUT AVOID USING THE FACILITY.
BECAUSE ATM WITHDRAWALS ATTRACT HEAVY CHARGES.

4 AVAIL A LOAN IF REQUIRED
WHEN YOU PAY BILLS ON TIME, YOU WILL HAVE A GOOD CREDIT HISTORY AND CIBIL SCORE.
BASED ON THE SCORE, BANKS DECIDE WHETHER TO APPROVE OR DISAPPROVE A LOAN.

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THE LEVELS OF FINANCIAL FREEDOM

THE LEVELS OF FINANCIAL FREEDOM

 LEVEL 6 : ABUNDANCE

(INVESTMENT CASH FLOW >> ANYTHING YOU WANT)

LEVEL 5 : INDEPENDENCE
(INVESTMENT CASH FLOW = LIVING COST)

LEVEL 4 : SECURITY
(INVESTMENT CASH FLOW = SURVIVAL EXPENSES)

LEVEL 3: DEBT FREEDOM
(FREE OF DEBT & START INVESTING)

LEVEL 2 : STABILITY
(LIVING EXPENSES = INCOME) + EMERGENCY FUND

LEVEL 1 : SOLVENCY
(DEBT/LIVING EXPENSES = INCOME)

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4 BIGGEST FINANCIAL MISTAKES AND HOW TO AVOID THEM

4 BIGGEST FINANCIAL MISTAKES
YOU SHOULD AVOID MAKING THESE
 

AGE 20: NOT INVESTING EARLIER

 AGE 30: NOT BUILDING OTHER INCOME STREAMS
 AGE 40: NOT PAYING OFF DEBT EARLIER
 AGE 50: NOT SAVING ENOUGH FOR RETIREMENT

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TIPS FOR PERSONAL FINANCE GOALS

 TIPS FOR PERSONAL FINANCE GOALS
1) BUY STOCKS ON MONTHLY BASIS

 2) SAVE 20%OF YOUR INCOME

3) INVEST IN LOW COST INDEX FUNDS.
 4) INVEST IN DIVIDEND STOCKS.
 5) READ 1 BOOK A MONTH.
 6) PAY OF ALL YOUR DEBT.
 7) CREATE ANOTHER STREAM OF INCOME.

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