Some financial basics everyone must follow


1) Have an emergency fund of not less than 1 year of your expenses.
2) Insure: Term, medical, personal accident and fire insurance for your house.
3) Don’t use revolving credit on your credit cards.
4)Simplify: have two bank accounts, one credit card and one demat a/c.
5) Write a will.
6) Don’t borrow except for buying a house.
7) Ensure the value of the house is not more than 5 times your annual salary.
8) Create a corpus of not less than 30 times your annual expenses before considering retirement.
9) Save first than spend so that you Spend less than you earn.
10) Try to save at least 35% of your salary.
11) Invest regularly.
12) Invest for long term; not less than 10 years, preferably 20 years or more.
13) Never stop your SIPs, especially in bear markets.
14) Never forget that all asset classes would always be cyclical.
15) Equity would provide the best return over long run than all other asset classes.
16) Follow portfolio diversification.
17) Follow asset allocation.
18) Have an advisor. The reward is worth the cost.
19) Check and review your portfolio at least once a year.
20) More than your knowledge, it’s your behaviour which matters most for success in markets.
21) Come what may; always stay the course.
22) Instead of time the market, give the sufficient time.

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