Implementing finance knowledge in practical life is much more difficult than you think.


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I was a commerce grad. Then did MBA. So 7 yrs of foray into finance and numbers (11th, 12th Commerce plus and then MBA)

Everyone around me (friends & family not related to finance) use to casually ask me about how to do investments, managing money, right car to buy for this salary, diversifying investments etc. I confidently use to answer them, "ye karo, voh karo, aisa mat karo"

But now when I am standing at cusp of starting a job. Feeling completely blank about how I should go with my investments etc. Every thought that I have gets challenged by some contradictory thought.

Example- I was thinking I will put 90% of my cash in hand in debt liquid fund so I can get more returns and the money is easily withdrawable. But that gave rise to another thought about Auto Sweep and should I use that instead of liquid debt fund.

Another similar dilemma is abhi se PPF maximuse karu ya gradually paise add karu ya I'll open it only when I want to maximise money in it.

Next is regarding credit cards. After knowing the benefits & perils of CCs I am still confused if I should get one or not. On one hand I feel I want to play the points game and will use rewards after earning points and on another hand I feel if I get one it will increase my discretionary spending more (in lure to maximise points) than I would want.

Has anyone felt the same? How did you tackle this limitation of knowledge in increasing your own financial well being?

Thank you.
@romeshd Don't mind. But from your comment it looks like you are confusing your book knowledge with investment knowledge. You need to learn investing and portfolio management separately.

Any investment plan that revolves around long term debt instruments such as EPF, PPF is a poor plan. Your plan should include Equity and Gold too. Equities should form the majority of your portfolio until you get closer to retirement.
@je93 MBA literally teaches nothing about personal finance. Thinking that being an MBA gives him personal investment knowledge is wrong imo.
@staz2648 Ohh. I didn't know that. I thought since it's "Finance" masters degree it should give you good depth of finance knowledge.
Well... Seems more like engineering degree 😊
@tamraho That is not what I meant. I was talking about cash in hand. If salary is 100 rs per month assume. 40 rs will be expenses, 50 will go towards investments and emergency fund, and out of 10 that remains in hand I am talking about putting atleast 9 rs in debt liquid fund till month ends. After the month ends that money will go in investments of next month. And if that is spent still not a problem.
@romeshd If you are already investing then put that cash into an emergency fund equalling 8 months of expenses. If you already have that, then invest it in equities. If you want to keep it liquid then put it in an FD. For now FD rates are high. Later when they fall, you can move it to liquid debt funds.
@romeshd Sounds like you've got analysis paralysis...too much information access and you keep weighing the pros and cons and forget to take action.

I don't think anyone will have enough information. Between a couple of equally good or equally bad options, just pick a route and stick to it. Later correct course if it doesn't work out. That's the best anyone can do.
@romeshd Buy 200GMs of Gold First. You have to use credit card only upto 30% of its limit. For everything basics is discipline. Credit Card is ur emergency line of credit. Gold is ur emergency fund or you can go for FDs not debt fund as you cannot redeem it during weekends.When redeemed it will take few days to reflect in account but with gold you can get fund from local pawn shop. While using credit Card use the amount which u have in bank account not more than it. If you follow this strictly then u don't have to fear.

Stop impulse buying. Uninstall Amazon, Flipkart and ecommerce apps. Unsubscribe ecommerce news letters. Uninstall food delivery apps. Doesn't mean you have to avoid shopping. Install app and buy things uninstall once delivered.

Take 7 days for any purchase. Consider Pro and Cons. Then decide to purchase.

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