Tag Archives: invest

investing for Gen-Z

Born between 1997 to 2012, oldest Gen Z today would be 24 years old, read carefully, what we are going to tell you may decide your financial future in years to come.

If you have just started to earn or going to be soon, and you might have some plans for life, well, you may know by now, life doesn’t go as planned, always. Covid 19 and the stock market crash of 2020 is the most recent and vivid memory with many of us.

So, How should we take care of our Finances? What should we do to avoid black swan events like Covid from affecting our finances in future? How can we make sure that we are self sufficient!

Well the short answer is INVEST, Invest now!

Note- how early you invest matters more than the amount you Invest, because Compounding works best later down the time.

Lets discuss how to Invest when you are in your 20s:

  1. You must first save some portion of your money, in-fact one thing that we all get to learn from Covid is we should have an emergency fund (3 to 6 months of our expenses saved) before investing, so that we can rely on it incase of any unfortunate event. Read more about Emergency Fund here.
  2. Divide your Income into 3 Brackets, Save, Invest and Spend. A rule of thumb to start with is Save 20 bucks, Invest 30 bucks and Spend 50 bucks of your monthly income (more better approach would be 50, 20, 30; but consistency matter more than the amount you Invest)
  3. Spend low, live below your means, or expand your means. Yes I get that you may be fresh out of college and in your prime youth, thinking to party like crazy. While no body is saying, don’t party at all, but limit it as much as you can, the earlier you get into saving and investing rather than spending the better your quality of life will be. so shush the Party Animal within or just tone it down a bit. I know its hard to digest, But think do you want to live like king as you grow or you want to cut on your expenses and go take some huge loan to maintain all that family expenses that are inevitable at an older age. Somewhere down the line, I assume you would like to have your own house, a car and what not, so better you start investing now & be frugal, for more peace later in life.
  4. Do Invest in Stocks, own them as your own Business! Don’t stress too much on getting it right, everybody makes mistake and so will you.

Do you need to be conservative or do you need to go wild, all in?

I would suggest a balance approach, now that you have 30% of your Monthly Income to Invest, I would suggest you to divide it further into different assets like Crypto, Gold and Stocks (now if the money is very less to even divide you can alternate the asset class every month).

  1. 10% (of Investing Income) -> Cryptocurrency, where in further you should divide in Bitcoin & Etherum or at least a few coins to be safe and not miss the opportunity at the same time. What I would do would be to have 50% of my Money (of this 10%) in Bitcoin, 40% in Ethereum and 10% in Others (like Zcash, Dash, etc). You may like to read more about Cryptocurrency here.
  2. 5% (of Income) -> In Sovereign Gold Bond or some form of Gold at least, if the amount is too small you may consider something like ‘ICICIGOLD’ ETF which is currently priced at 44 rupees a share.
  3. Left with 85% of your Investing Income, you can go into Stocks directly. (In case that 85% of your income is exceptional, you are richie rich, I am glad you came here, you can further divide the amount into real estate and stocks!)
    • 10 – 50% in Broad Market ETF that tracks the index like ICICINIFTY, HDFC Sensex Plan for India or VTI, VOO for US Markets. You can make your portfolio 50% of this in case you not at all care about markets and don’t have time even look at your portfolio once a month. As a matter of fact, the legendary Investor Warren Buffet himself suggest a low cost ETF for all Passive Investor. Read more about Index fund here.
    • 25% in Momentum stocks, these are basically risky Mid & Small cap stocks, and since you have time in your hand you can take some risk. You can use smallcase for this. Click here to know more.
    • 10% on long term trend/idea you like for example Electric Vehicles, or The Great Indian Middle class, whatever you believe will be huge with time.
    • 0 – 40% in Direct Stock picks, now seriously I want you to take some risk, look around buy stocks of brands you own, you consume like that ITC cookies you eat, or Hindustan Uniliver Soap you use or Bajaj Bike you Vroom vroom… (Disclaimer – we are not suggesting / advising any pick). Now this can be most volatile part of whole portfolio, but it can be most rewarding if the research is done right, also with time you get better in this. Always always avoid buying on someone’s advice do your own due diligence. If you are someone who believes more in the promise of blockchain & cryptocurrency than you may like to flip the percentages 10% here and 40% there 😉

To Recap, put numbers in to perspective, lets say you have 30,000 as the salary than 30% would be 9000, Put 900 of it in Crypto (450 BTC, 360 ETH, 90 other Coins), 450 in Gold, 7650 in Stocks!

Remember – If you can’t achieve the percentages listed above, let it be, a bit up or down here and there won’t matter.

The Idea is to Diversify, Invest Early and Be consistent. Time is your best friend.

CAGR

To Read about the Common Mistakes that every Investor make, and to avoid them, click here.

Looking for some Earning Opportunity, click here.

Some TO DOs’ of Investing (recommended reading)

Thank You for Reading, We wish you loads of Happiness, Success & Wealth in Life. ~Team RiteFinance.

Are we Saving it?

Hello Riters, hope you are having a good time, enjoying yourself and making loads of Money. No? Yes? well regardless, these tips will help you grow your wealth. So lets dive in! (Opinion Alert – most of these below are my personal opinion)

5 Tips to Save your Money

  1. Automate your Savings – yes! you need to Automate this. As they say out of sight is out of mind, every first of month or whenever your Income gets credited Automate a recurring deposit to another account that you can’t / won’t access for your expenses. Even if its just 10% of your Income, over time it can grow to a substantial amount which you can later Invest. Remember Save first spend later.
  2. Don’t Shop when you are hungry – Please avoid running to a mart or your favorite restaurant at the very moment you are hungry. Plan it well before or else your mind will be fogged by that juicy extra Guacamole or that Cheese round the corner.
  3. Get your Caffeine fix at home – You may need to avoid daily Chai Point Tea or that Starbucks Coffee as a recurring soul not so satiating. Instead buy a Coffee Maker (Indians out there just get that pan) and have some mouth watering Dark Roast Ethiopian Coffee, and you can get the cost down from few dollars to few cents (150 Rupees to just 20 rupees).
  4. 30 Day Rule – This one is controversial, good to have, not exactly saver but a thumb rule to save on expensive expenditures. Whenever you want to make a big purchase like that Gucci Scarf , sleep on it not one day but full month, yes, unless its peanuts money for you, wait till that luxury is yours, so when you buy it you know you really need it!
  5. Cut those Credit Cards – Stop those Credit bills from drowning you in debt. Only own the card if you can repay it! Yes, if you can’t pay on time, ditch it! This one really depends if you sure can repay within a month go ahead and avail those extra points and benefits, but if you can’t destroy, burn it to grounds or just put it away from your sight.
credit cards

Thank you for reading, if you are already following Two or more of these tips do let us know how is it going. Keep Learning.

Money Matters

Two weeks back we discussed about the Worth of Money where we mentioned things that are above Money, and why they are above Money. Today lets discuss about why Money Matters!, if you haven’t read my previous blog post the Worth of Money i highly encourage you to do so.

Money, means a whole lot of emotions to many of us. Often times we either avoid the topic or doesn’t discuss thinking what others will think. Majority of us have associated the negative emotions like Greed, Lust, Selfishness with Money. The way majority think about Money is also the reason why majority lacks it. Today we urge you to think like Minority.

Let us think of Money as Freedom, Money as a Tool, Money as a Servant not just for you but also for your loved ones. Make Money a positive emotion and wealth will follow you. That said, I am not saying Money doesn’t make a few of us blind, and force us to do even the gruesome crimes like murder, rape etc. But before criticizing Money lets not forget it is just a Tool, And a Tool is as good as the person using it. All Money do is give you the Power, and the Freedom of Choice. How you use this power or freedom is totally up to you. You can use Money to give back to the society, or you can use it to further exploit the society. Just like you holding the cash have the choice where, how and when to spend.

Most of us live paycheck to paycheck, and are a few paychecks away from insolvency. Some of us are already broke and are spending way above the means i.e. we earn 100 dollars and spend 110 (this situation is worse in some countries than other). The point is many of us lack financial literacy, because it isn’t taught in any class or anywhere in this professional world! The Education system is designed in a way to not let you be free but instead follow the instructions. It doesn’t teach you how to think, but what to think. That is why you need to take control in your hand. You need to switch gears, or it will be too late before you reach the destination. The first step to be Financially Literate is to understand the financial mean – the Money. So, lets discuss why Money Matters.

5 reasons why Money Matters –

1.Basic NeedsMoney help you build a shelter, buy some clothes and get food on your plate. Without these you pretty much can’t survive.

2.Dream Executor Money can help you execute your dreams. It give wings to your desire. You want to be a pilot, go enroll in a University. You want to be a hotelier go own a Hotel. You can also start a Business of your choice, without the headache of getting it the required fund, because even if you are not funding it fully with money comes the networking, the contacts, the people whom you can ask to invest. With proper funding dreams get traction in the physical world.

3.As a Fuel – Money act as a fuel for the causes you care about. You can start a project or a movement to help the needy, the weak or the underprivileged. Money is not just for the self it can also help fuel your selfless desire, and things you truly care about.

4.Gives a ChoiceMoney gives you an opportunity to choose what you like. Think for a second, Did you buy a car you like or the one you had to? Did you buy the watch you always wanted or the one you just had to? Did you buy your dream house or the one you can afford? With enough Money you can afford that Dream Car you always wanted, or the Mansion you always dreamed about. Money can give you access to all the exclusive & luxury items.

5. To achieve the highest self Money helps you live with abundance & prosperity, true to your purpose. Your consciousness matters! With Money you can spread the consciousness, open up your heart, and feel the bliss, spreading joy everywhere.

Still not convinced, just imagine the smile you can give to a child, buy just buying them a little balloon. So next time you think about MONEY, choose your words wisely.

Thank You Riters, I hope you are enjoying this beautiful Sunday with your loved ones. Like if you liked this post, follow us and do check some of the tips and tricks to financial freedom.

The Rich Way

7 Things that Rich do different than Poor. Welcome on-board, lets help you put that extra buck in your pocket.

  • Passive Income – Rich earn even in their sleep. Yes, they have a source of Income that puts Money constantly into their pocket even when they are not working. Passive Income of 1000 INR is worth more than 10,000 INR, how?, just imagine the time saved and the freedom gained. After all wealth is for ones Financial Freedom. One source of passive Income is by buying stocks that pays you dividends regularly (after every quarter or so). You can start with a small investment, all you need to do is open a Demat account with a brokerage like Zerodha and take it from there (check out our blog post on how to avoid investment mistake before investing, also follow this space for more tips and tricks)

  • Keeping money is harder than making – Money management is not easy. The expenditure for majority of people grow proportionally with their Income. This is also the reason why almost all lottery winners end up spending what they have won. The urge to spend the money to show Rich than to be Rich is strong. Rich definitely know better Money Management than Poor. Once you made your first crore to make the second all you need to do is replicate. But how to save & invest and let your Money grow on its own is not something majority understands.

  • Focus on Increasing income not cutting the cost – Yes, you heard it right. Rich don’t try cut the cost in small things. Majority will walk an extra mile saving cost rather than focusing on earning more. Instead of cutting cost every now & than, we urge you to first think like Minority and Increase your Income, so that you can afford all the nice things in your life. How?, May be learn a new skill that pays you more, or do some side hustle that help put some extra cash in your pocket.

  • Over 50% of Rich earnings go to investments – Yes, Invest like crazy! If you want to be wealthy, you need to have a tight grasp on your savings & investments. You need to be able to park enough money (the more the better) in different assets. You may diversify your portfolio in assets like Gold, Real Estate and Stocks. If you want some quick tips on Investment do check out our very first blog here. Almost all wealthy people and brands invest more than 50% of their earnings. If you are beginner and don’t know where to start you may like to read our blog post here. To start Investing in Stock Market, you can open a demat account here.

  • Don’t borrow Money if it is not to make Money – This rule applies strictly for the elites. Rich don’t borrow unless the money helps them make more Money. They won’t pay bank the interest unless they make their cut. By borrowing money like majority to finance your new house or buy a new car your making the Bank & Bankers wealthy while putting yourself in debt. Debt not taken for the assets that put Money in your pocket is useless. So think whom you want to make rich, yourself? or them?

  • Multiple Streams of Income – To be wealthy you definitely need to have the money flowing in through multiple ways. A side hustle, a full time Business or job, a passive source of Income; you need to work hard to at least grow the 3 sources of Income. Multiple Source of Income also keeps you portfolio hedge against a Crisis. You are less likely to be victim of a Crisis, and more likely to be at peace. An Online side hustle, free lancing etc may come handy.

  • Invest in self – Investing in self is one of the most underrated advice. Ever wondered why Successful people read more than an average person?, the answer is simple your knowledge = future returns, the more skills you know the greater the opportunity to multiply your Money. This is the same reason why a Businessman earns more than an employee, they have figured out a solution, they know the full breadth of the System and not just a single piece of the puzzle like the employee who may be specialized on a single task. So learn a new skill, or grab a book, even better listen to two free books of your choice here at Audible.

Lastly but not the least, if you want to know more definitely check out this video by Alux.com. This article is inspired by the same. While the opinion above is completely ours, the primary source nevertheless remains this video.

Thank you for reading. Do follow us for more. Together lets be Financially Free.

The Initial step to Freedom

Everybody wants to be financially free, but a few knows the way and a very few actually puts in the effort.

Welcome to riteFinance – the pathway to Financial Freedom! Today we will discuss how to create wealth.

The very first step to wealth creation is to know your spending aka track your expenses. To track your expenses you can use a simple excel sheet or a more suitable tool like mint. Whatever you choose the process is very simple, you need to list down all your expenses from day 1 of every month to the last day. And you need to do this for at least 3 months to get an average. If this Average is more than 100% of your Income, then you need to either A. Cut down your expenses, or B. Increase your Income, though an Increase is always advisable but cutting down the expenses is the first thing you should do. Remember ‘Live below your means’, buy only what you can afford not what your credit card can afford.

Once we know how much we spend, the next step is to create an Emergency Fund, i.e. set aside 3 to 6 months (6 recommended) of cash reserved, only to be used for Emergency. If you need to know more about the same, we already have blogged regarding the same here.

Now, if you have the above two steps taken. The next question is ‘How to create Wealth?‘. Yes, we haven’t yet discussed that. The above steps won’t help you create wealth, but it will give enough peace to progress towards Financial Freedom.

To begin your journey, you must know how much of the Income is your expenditure (again if your expenditure is more than or equal 100% we urge you to increase income or cut the expenses). Calculate %Expense of Income, for example if your Income is 100 INR
(or for that matter any currency), and your expense is 75 INR than it becomes 75%.

One thumb rule to manage your Finances especially if you are beginner is to follow 75-15-10 rule i.e. Spend 75% of your Income, Invest 15% and Save 10%. Later on as you get better grasp of your finances and is able to cut more on expenses / increase your income then one should progress to 50-30-20 Rule, 50-30-20 rule can also be called as the Ultimate lifetime Money Plan. It simply means one should Spend 50% of the Income, Invest 30% and save the remaining 20%. And in case your expenses are less than 50%, great you can invest the remaining. You can read more on Investing here.

Remember the you need to Invest like crazy to be Wealthy, while if you Spend like crazy you just end up looking Rich. Choice is Yours.

Tip – Donate a small amount from your earnings to a Charity, and you will start feeling Abundance & Positivity surrounds you, fueling in more wealth and adding a sense of purpose to your life. The more you give the more you will be in a position to receive. Give it a try!

Thank you for reading. For more such Financial Tips, do follow us @ritefinance. Together let’s build Wealth. Happy Learning…