Need financial advice for someone who's finally starting to think about growing the earned money
So, I have a good stable income now. But life's getting serious by the day as I grow older by the day. Need to start taking more financial responsibilities overtime when parents take their retirements in a year or two. So, thinking for starting somewhere now, small, slow and steady, before the big step up comes in. Have a lot of questions, related how to save, invest, spend, FIRE, MF, trading and so on. So, don't know where to begin with. Any heads up would be helpful for me to keep the conversation going with you. So, starting this like a conversational thread, as a reference for me and many more like me.
in the order of highest precedence:
1. insurance - med / health
2. emergency fund
3. start tracking day to day expenses (see if you are aligned with 20:30:50 rule)
4. mutual fund SIPs
… and trading is not a must to have.
1. Insurance on top of what the employer offers ? Also I have an ongoing Kotak Life policy. Veeerrrrrryyyyyy long term one, but poor returns though. I only realised this late, but anyway, I think its main benefit the life benefit.
2. Emergency fund - what's the minimum you think I should target, for a family of 5 ?
3. Does long term investments in any form fall into any of these brackets ?
1. Sometimes company insurance is just for namesake. Might not have essential benefits. Ensure theres good claim settlement ratio and parents are covered. It’s a bad idea to combine insurance and investments. We will never know when we will be out of jobs. Good to have an additional layer of protection.
2. Emergency fund can be 3-6 months of your monthly expense (including family) This will ensure you can safely look for another job just in case. You can also keep a part of this invested (without lock in, and less risk)
3. SIPs can be done for long term.
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Oh, look at you, finally adulting! Start with a budget, build an emergency fund, and maybe dip your toes in mutual funds. Google FIRE for some inspiration. Happy growing up!
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