Most of us on Booksie are students. Many are employed and a few are retired. The common factor binding all of us (apart from writing) is a need to earn. Students earn towards their education. A responsible person can not only earn but systematically saving and investing will make his/her retired life comfortable too.
Always keep your pay stubs, monthly bank statements and tax files up to date. Remember, filing taxes on time each year not only gives peace of mind, it saves money too. Lets see how we can cruise through life without incurring loss or debt. These tips are only for guidance. Consult your financial advisor before investing.
- Earn: Even a part-time job can give you enough money to cover your tuition costs. Earning makes you self-dependent and gives a tremendous boost to self confidence. So, start early to reap the benefits.
- Save: If you earn $ 1000 a month, consider saving $ 50 out of it. That totals to $ 600 a year. When you invest it in a compound interest scheme, towards your retirement, you will have a neat packet with you.
- Invest: When you have surplus money, it is best to invest to get good returns. But do your home work for there are various investment options. Real estate, shares, mutual funds, bonds and even an insurance policy are good investment avenues.
- Spend less: This is the golden rule. If your savings are more than your spendings, you will never have to depend on anyone and always be self reliant. But if the situation is otherwise, debt will be knocking at your door.
- Credit Card: Use it wisely. For it sucks money. One credit card is sufficient for a person. And keep track of all your purchases. Credit cards are meant for over-spending. So, beware. You dont want to end up in debt or loss.
- Purchase a home: This is the best investment you can make. Once the home is yours after clearing all the mortgage instalments, you can sell it at a profit and that too tax-free. How is that for a tax-free income.
- Insurance policy: Always have your life insurance policy written in trust. Go for guaranteed policy and not a reviewable one. Always take an individual policy and not a joint one. Include critical illness cover and not a terminal illness one.
- Risk taking: There are high risk investments like shares. If their value goes up, you can earn in millions but when it goes down, millions will become pennies. Risk and returns go hand in hand. Decide wisely.
- Rule 72: This is a golden rule for doubling money in certain number of years. Divide 72 by 12, you get 6. It takes six years to double your money at the rate of 12% interest.
- Charity and Greed: Always set aside a portion of your earnings for charity. Your help goes a long way in helping a needy. Your reward then lies with God. I have implicit faith in this. On the other hand, shun greed. It will never make you rich but take away your peace of mind.
The above tips are a basic guideline for keeping healthy financially. You will have some of your own valuable tips that you follow in your daily life. Would you like to share them with me (for I too would like to be benefitted?) So, heres hoping you will not only write but earn too.
There's no money in poetry, but then there's no poetry in money, either. - Robert Graves
Cheerio
Bubbly. That's a good one. Money is an essential part of life and one is practically handicapped without it. In India we've various schemes for savings and investments like:
1. Post Office Savings Scheme
2. Bank Deposits
3. Company Deposits
4. Health & Life Insurances
5. Other misc. schemes
Suppose I invest Rs 5000/month at 8% interest beginning at age 30 for a period of 35 years, I'll get Rs 1 crore (a whopping amount) totally. This takes into account 5% inflation rate growing each year.
As they say, early bird picks up the prey. So start earning early, start saving early and start investing early. For you reap the befits at retirement and throughtout life too in need of emergency or otherwise, you have ready funds and don't need to depend on anyone.
Money is a reality, which one cannot ignore in today's times - be it a student, employed or retired. Its time to give it a serious thought, planning and working towards your goal.
An interesting and informative essay. Keep it up.
Posted: Jun 27, 2008
Bubbly, Your editorial was great and your tips were even better. I retired early in life due to an untimely disability, but before I got hurt on my job, I invested my money into real estate. I bought a home, fixed it up and rented it out. The money I made from rent went into the purchase another home. At the age of 25 I owned my own home along with had 3 rentals under my belt, and my bank account grew accordingly. Here's my best tip on real estate. Get to know the renter before you allow them to rent your home, and never, ever rent to family or friends. It can destroy your family and breakup a friendship for ever. Plus, it's hard to fight them in court.
Posted: Jun 27, 2008
Jack the Knife
(not registered user)
I would add this to your financial tips: one should calculate how much yearly he or she would need to maintain a certain lifestyle. That is the target number. Add up how much you would get from pensions and Social Security (Sorry, students - these numbers will be unknown to you at this time in your lives)and subtract this from the target. The remainder will be the nest egg you will need. The rule of thumb is that, over time, if you only spend 4% of this every year, you will never run out of money. So, Social Security (if it will still be there) plus pension plan income plus 4% of your investments equals the money you will need to live the life you want. When you get to this point you can retire, and spend ALL your time writing. (Assuming that writing is not the job from which you are retiring). Of course, this rule of thumb was created before we had 4$/gal gas, and going higher, so never mind!
Posted: Jun 29, 2008
Hi Bubbly, great article! The way you have written it shows you have an organized mind. And that is the key to financial success. I would like to add a couple of tips of my own - I have found them very useful in organizing my finances. There are several things I do annually:
1. Keep an income-expenditure diary for two months - the first and the last months of the financial year. The latter shows me my over all spending style for the past year, and helps me create my budget for the coming year, by letting me know where I need to make cuts and where additions; the latter lets me know if I've been sticking to the budget I have made.
2. Budget for a new financial year. I made immediate, short term and long term purchase plans and try sticking to them. It doesn't always work, but whatever does, helps.
3. I sanction a certain percentage of my income every month for wild spendings. That way I remain guilt free purchasing whatever silly or frivolous things I want and still remain within the budget.
4. Before buying anything, I ask myself: "How often am I going to use it, if at all?" and "Where am I going to keep it in the house? For eg. does my wardrobe or the bookshelf have any spare place for this?"
Posted: Jul 1, 2008
Hmm, some nice points, though I don't think MOST of us are students. I write and have a full time job, I pay my way but trust me, if my writing ever took me somewhere I'd follow it. It may sound like a dream to you but it's far better than sitting at my desk everyday believing there's nothing more for me. I think as you get older priorities change, money is good but it's not everything, responsibility is good, but ambition can come in different forms and it isn‘t always career orientated. I don't know, it's a tough call. Good points though! ~ Nixie
Posted: Jul 2, 2008
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