Bank Loan 1616

Top Menu

  • Locate Us

Main Menu

  • Home
  • Accountant
  • Credit
  • Finance
  • Investment
  • Loan
  • Money
  • Mortgage
  • Trading
  • Locate Us

logo

Bank Loan 1616

  • Home
  • Accountant
  • Credit
  • Finance
  • Investment
  • Loan
  • Money
  • Mortgage
  • Trading
Finance
Home›Finance›What is the first rule of finance?

What is the first rule of finance?

By Jenson Frankie
November 10, 2022
221
0
Share:

Upon entering the job market young professionals have one common goal. The said goal is to accumulate enough wealth for the future. People have the said goal because the said wealth might be useful for them after retirement. The long-term wealth accumulated might be useful for taking care of day-to-day expenditures after retirement. But, while people may know what they want, i.e., accumulate long-term wealth, they don’t know what they should do to achieve what they want. One of the things you can do is formulate a financial plan. Sticking to the said plan might help you in reaching your financial goals. The process of formulating a financial plan can be defined as financial planning.

The process of financial planning requires due diligence on your part. You need to clearly lay down things like income, expenditures, and goals. You need to make note of these things after assessing your risk-taking capacity. But there are certain thumb rules that you need to follow to bring your personal finances on track. Once you are accustomed to the rules, you can carry out proper financial planning exercises to bring your savings in line with the goals. Here are some of the important thumb rules you need to follow so that you can make better financial planning decisions:

  • Start saving as soon as you start earning:

The ideal situation will be that you keep aside a part of your income as savings from the day you start earning. You need to plan your discretionary and non-discretionary expenditures from the balance. Regardless of how little your savings are, it is prudent to begin early and inculcate the habit of saving. In case you already have listed-out your goals, you need to determine how much you need to save for achieving your financial planning. Then, keep saving regularly towards achieving your goals. Those who do not follow this rule, will splurge first and then save whatever is left for long-term goals. You need to avoid this practice.

  • Build an emergency fund:

Before you start your investment journey, please make sure that you have an adequate balance on the emergency funds. As a thumb rule, you need to keep an amount that’s equal to at least six months of expenditure in a mix of savings accounts and short-term or liquid funds. An emergency fund or mutual fund might help you to tide over financial emergencies such as job loss or a medical emergency that requires upfront cash.

  • Invest in schemes that offer higher returns:

Regardless of the salary you earn, you should keep aside a portion towards savings. You can start with a very low investment amount and over time, increase it as your financial situation improves. With age as your duration for achieving goals come closer, your savings also must increase. During middle age, you need to save a higher. Please remember that savings here refer to investing your money into high-yielding financial schemes and not merely depositing it in a bank account.

  • Make sure to have life cover:

There is another thumb rule that you need to follow. It is important that you should have life coverage that’s 10-15 times higher than your take-home annual income. A life cover will help your family to maintain their standard of living in your absence. Also, liabilities such as a home loan also need to be accounted for additionally.

  • Save for retirement:

As stated earlier, a common goal every professional has is accumulating enough wealth for the purpose of retirement. While working, you need to have a plan and start saving a part of your income so that you can retire with enough money.

Other than the five above, there are several other rules that you need to follow so that you can retire with enough money at your disposal. In case you have some doubts about retirement planning, please contact a financial expert.

Previous Article

What Factors Determine The Value Of Cryptocurrency?

Next Article

Things You Should Know About Personal Loans ...

Share:

Related articles More from author

  • Finance

    Purposes of Various Personal Bank Loan Types

    October 12, 2019
    By Jenson Frankie
  • Finance

    How to pick the best Equipment Finance for the Business?

    March 15, 2018
    By Jenson Frankie
  • Finance

    How Does Tax Forgiveness Work?

    October 8, 2022
    By Jenson Frankie
  • Finance

    Learn About Future Advancements Before You Buy ATM Machines

    April 8, 2020
    By Jenson Frankie
  • Finance

    What Factors Determine The Value Of Cryptocurrency?

    October 11, 2022
    By Jenson Frankie
  • Finance

    Six Words to explain Business Financing

    March 19, 2018
    By Jenson Frankie

Comments are closed.

  • Loan

    Unsecured Loans – Explaining Guaranteed and Unsecured Unsecured Loans

  • Finance

    Purposes of Various Personal Bank Loan Types

  • Credit

    The Details About Credit Rating

  • Recent

  • Popular

  • Comments

  • MetaTrader 5 Trading Platform Overview

    By Jenson Frankie
    February 3, 2023
  • 3 Tips To Help You Sell Your Home In The Winter

    By Jenson Frankie
    December 23, 2022
  • Things You Should Know About Personal Loans (Forbrukslån Kalkulator)

    By Jenson Frankie
    December 15, 2022
  • What is the first rule of finance?

    By Jenson Frankie
    November 10, 2022
  • What Factors Determine The Value Of Cryptocurrency?

    By Jenson Frankie
    October 11, 2022
  • MetaTrader 5 Trading Platform Overview

    By Jenson Frankie
    February 3, 2023
  • The Very Best Online For Free Personal Finance Tools

    By Jenson Frankie
    March 18, 2018
  • Six Words to explain Business Financing

    By Jenson Frankie
    March 19, 2018
  • What It Really Way To Buy Owner Financing Homes

    By Jenson Frankie
    March 20, 2018
  • Import Financing Options To Select From

    By Jenson Frankie
    March 21, 2018

Recent Posts

  • MetaTrader 5 Trading Platform Overview February 3, 2023
  • 3 Tips To Help You Sell Your Home In The Winter December 23, 2022
  • Things You Should Know About Personal Loans (Forbrukslån Kalkulator) December 15, 2022
  • What is the first rule of finance? November 10, 2022
  • What Factors Determine The Value Of Cryptocurrency? October 11, 2022
  • How Does Tax Forgiveness Work? October 8, 2022
  • 3 Biggest Money Mistakes People Make in 2022  July 26, 2022

Archives

  • February 2023
  • December 2022
  • November 2022
  • October 2022
  • July 2022
  • June 2022
  • May 2022
  • March 2022
  • February 2022
  • January 2022
  • October 2021
  • September 2021
  • August 2021
  • May 2021
  • December 2020
  • August 2020
  • April 2020
  • January 2020
  • October 2019
  • September 2019
  • July 2019
  • June 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
March 2023
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
2728293031  
« Feb    
  • Finance

    MetaTrader 5 Trading Platform Overview

  • News

    3 Tips To Help You Sell Your Home In The Winter

  • Finance

    Things You Should Know About Personal Loans (Forbrukslån Kalkulator)

  • Finance

    What is the first rule of finance?

  • Finance

    What Factors Determine The Value Of Cryptocurrency?

  • Home
  • Accountant
  • Credit
  • Finance
  • Investment
  • Loan
  • Money
  • Mortgage
  • Trading
© 2021 Bank Loan 1616. All Rights Reserved.