Personal Finance for Young Professionals

Personal Finance for Young Professionals

The young people in their early 20s – 30s with a ‘white-collared job/ profession is commonly referred to as Young Professionals. Do you belong to this bunch of young and ambitious youth?

Then you are likely to have just completed your studies and are filled with dreams and aspirations.

So what are you aiming at acquiring and possessing in life soon? Is it your first car or a home in your name? Or is marriage on the cards to fulfil your dream to start a family with your chosen one?

Or do you belong to that wise category of youngsters who are looking for know-how to gain insights into personal finance for working professionals before making any life-changing decisions?

Is managing your finance difficult?

It has been commonly observed that young professionals like you find it difficult to manage or consider the thought of managing their personal finances at the onset of their careers.

That is primarily because –

  • You feel life has just started for you and you are too young to think of saving for the future as you have a lot of time at hand and can afford to think about financial planning and investments a few years later.
  • Do you lack knowledge of personal finance that could include but not limited to how to go about it? What it is all about? When to start saving/ investing? What is the right amount to invest – is my earning too little to consider? What is the right time to begin? What is the right place to invest to optimise return? etc.
  • You may be wondering who can guide you properly and not treat you as a ‘run-of-the-mill’ investor.
  • It takes time for a youngster like you to understand the importance of managing expenses responsibly early in life; at times till you have undergone real-life exigencies yourself.


If you find any of the reasons even somewhat matching your current mental state, then take a deep breath and read on, as this article will not only guide you on how to go about with personal finance for working professionals like you but also make you mindful of money-mistakes to avoid; thus saving you from guilt and repentance in future.


A thumb rule to remember:

Irrespective of whether you are married or not, you should follow the 50:30:20 rule that says you must –

  • Budget your living expenses within 50% of your monthly income at hand. ‘Living expenses’ can range from repayment of your education loan, rent to be paid in the city of your work if you had to relocate, your groceries and utility bills, medicine, local conveyance, insurance, etc.
  • You must try and save/ invest 30% of your monthly income to live your financial dreams in future.
  • 20% of your monthly income you can spend on your free will on partying with friends, dining out, buying gifts and accessories among other things for self and/ or loved ones.


This basic rule will ensure you have laid the foundation for your personal finance and move ahead with planning your investments to live your financial goals in life by following the steps detailed here.

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A step-by-step guide to managing your Personal Finance for young professionals


Step #1: Identify your basic needs

In order to optimise your living expenses, you must understand your basic needs as listed below to ensure you and your loved ones are financially safe and free from untoward financial burdens in future.

This is the first step to effectively plan personal finance for working professionals.


  • Education loan

    If you had availed education loan to complete your higher education, then your first priority should be to set it off at the earliest.

    This is because the interest paid on this loan is considerably high that can be fruitfully utilized to use to plan other investments towards wealth creation.

    So other than the EMI debited from your account; whenever you get some extra income like incentives or performance bonuses, you must direct a major part of that money towards setting off your loan.

    Same for your credit card bills and personal loans, if any. This is because you must remember that loans have never done good to anyone, but have eaten into your disposable income.


  • Health insurance

    Even before your start planning your finances, you must buy yourself health insurance coverage. Even if you are eligible for a medical insurance cover from the organisation you work for, still you must consider purchasing one on your own.

    That is because the younger you are, you are expected to maintain the best of health; and the cheaper your insurance would cost.

    If you are reading this article today, you are either a ‘Covid-Warrier’ or would have survived the wrath of the coronavirus pandemic and the exponential amount of job loss people suffered other than lives lost to the germ.

    Thus there is no guarantee about anything in life as we have witnessed in the past eighteen months and more.


If you live in a Tier I city, then the minimum health cover* should be INR 5 lakhs.

In case your parents do not have their health insurance in place, you may want to consider a family floater of the same amount.

However, if you are married, your ideal health insurance family floater should be INR 10 lakhs, which you should increase with top-ups with passing years.


  • Term life insurance

    The biggest ‘IF’ is built in the word ‘LIFE’ alone. To protect your family in the face of financial exigency resulting from any untoward incident; like disease, disability or death; it is strongly advised that you buy a term life insurance of at about 22 times of your annual compensation (as approved and recommended by IRDA for your age group).

    Given that you are in your 20s, a 50 lakh term cover would not cost you more than INR 6000 per annum – a cost of less than INR 16 a day. (source online applications on


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Step #2: Budget your finances:

Though it may apparently seem that living on a budget is mundane, it will actually help you live life king size by optimally utilising your disposable income the way you want to.

Wondering how to budget? Just make an excel sheet with a detailed list of the monthly inflow of income and expenditures. That will help you allocate and reallocate expenditures and/ or cut down unnecessary expenses as well.

The 50:30:20 guideline will come in handy in this exercise.

In case you feel you are someone who fails to restrict your temptation to withdraw and overspend money; you may want to look at siphoning out a certain specified amount of money from your salary account to another account via an auto-debit mandate the moment your salary gets credited every month.

This way you may cheat your mind to an ‘out of sight, out of mind’ state and help you forget the urge to may unnecessary withdrawals.


Step #3: Build an emergency fund:

As the name suggests, this fund is aimed at helping you tied over unforeseen, unplanned and uncalled for a financial crisis if and when it arises in life like the ongoing Covid-19 pandemic or any natural calamity like floods, earthquakes, etc.

These kinds of an emergency situation can result in job loss, pay cuts, death of family members, medical emergencies and more, as we have been witnessing since early 2020 as well. This makes life and works completely uncertain.

Thus it is prudent to build a contingency fund as a part of your personal financial planning for the future.

As mentioned in step #2, you can start building this fund by setting aside a specified amount of money (via auto-debit mode) in a separate bank account and soon you will find a considerable corpus built to support you in days of emergency.

Other investment vehicles used to build emergency funds are fixed deposits, recurring deposits, liquid mutual funds too depending upon your need and risk appetite.

Experts say, ideally you should have 3 to 6 months of monthly expenses as your emergency fund.

Some are also of the opinion that you should better provision for 9 months of expenses in the face of very severe emergencies like the ongoing coronavirus pandemic.


Step #4: Define your financial goals:

Just as we know that it is important to know our destination in order to choose the right paths to set sail towards it; similarly you need to know and define your financial goals for effective management of personal finance for working professionals like you.

That will help you choose the various financial tools/ vehicles you can invest in to help you achieve your goals.


Financial goals can be defined broadly into 3 categories viz. –

  • Short term goals

    Those are likely to come up within 3 to 5 years time; like setting off your credit card bills and/ or education loans, down payment for your first car.=


  • Mid-term goals

    That has a timeline of about 7 years to maturity, like your own marriage, childbirth, etc.=


  • Long term goals

    They have a timeline of 10 years and beyond and can include, children’s education, your retirement planning, down payment for your second home, wealth creations for a family vacation to exotic locations or even upgrading your car among other financial goals and aspirations.=


To embark on your journey into personal finance management with proper knowledge and make conscious decisions for your future, we urge you to take a quick course on financial planning with Koppr

This has helped youngsters like you make wise decisions around their investments from a very young age and we believe it will be a value add to you as well. We are there to help you in case of further queries.


Step #5: Choice of investment vehicles:

  • For long term goals:

    Make equity your best friend towards wealth creation for achieving your long term goals.

    Since the subject may be new to you, begin with SIPs of Systematic Investment Plans in ETF (Exchange-traded fund) schemes and/ or mutual funds with maximum equity exposure.

    This involves a monthly debit of a specified amount of money on a particular date of the month for 5, 10, 15 or 20 years and more depending on your investment horizon and the time you have to see your dream mature.

    Given that you are only in your 20s, time is the magic potion that you have on your side that gives the power of compounding enough time to show its magic to create phenomenal wealth for you over a period of time as most of your long terms goals defined earlier are likely to surface at least a decade and beyond from now.

    This will allow your money to generate enough wealth for you while you can happily concentrate on your career development and in pursuit of other interests.


You must ideally have at least 4 SIPs on a specified date on every week of the month to reap the optimal benefits of rupee-cost averaging on your investments that happen all through the month.

Let us take a few examples here for a better understanding.
Refer to the table below that shows you the power of compounding on your wealth. Say you are 23 years old today and have invested INR 5000 in an equity-based SIP for 7 years that have yielded you a corpus of INR 6,10,000 after 10 years at a modest return of 10%.

The same investment if continued for 10 years can get you a corpus of INR 10, 33,000.

However, if you keep that money into the account for 20 years without further feed, your yield increases to INR 27,96,000 without any further effort from your end.

And say if you have been patiently feeding your SIP for 20 years and kept it for 10 years more, they can build a wealth of INR 1.04 crores against an investment of only INR 12 lakhs!

Such is the magic of compounding!


SIP in Equity Mutual Fund  SIP in Equity Mutual Fund SIP in Equity Mutual Fund SIP in Equity Mutual Fund
Age  Age 23 years Age 33 years Age 43 years Age 53 years
Instalment amount INR 5000 INR 5000 5000 5000
Term of investment 7 10 10 20
Term to maturity 7 10 20 30
Rate of interest/ Return 10% 10% 10% 10%
Total amount deposited INR 4,20,000 INR 6,00,000 INR 6,00,000 INR 12,00,000
Total return earned INR 1,90,000 INR 4,33,000 INR 21,96,000 INR 92,00,000
Maturity Amount INR 6,10,000 INR 10,33,000 INR 27,96,000 INR 1,04,00,000


The best part about these investments is that in case you are in need of money, you can always make partial withdrawals from the investments buying selling a bunch of units without having to liquidate/ break your investment.

SIPs have been known to help support the long term goals of youngsters like you in ways more than one.

As you grow in your professional life and your income increases, and you get your extra incentives/ bonuses, ensure that you buy more SIPs and also invest in a few fundamentally stocks/ equity shares, as they too are known to build wealth over a period of time.

You must also consider investment in ELSS (Equity Linked Savings Schemes) as they are tax-efficient U/S 80C and will help you create wealth and save tax as well.

And we all know, tax saved, is income earned! To know more about managing finances and monitoring your investments we urge you to download the Koppr app from the Playstore to gain further insights.


  • For short/ medium-term goals:

    If you are a risk-averse person, and your investment horizon is less than 10 or 7 years, you have an array of investments options to choose from for peace of mind. Most of these debt and equity-related instruments are tax-efficient as well to ensure you save tax and thus further make money that way.


    • Bank FD –

      If you choose a bank fix deposit for a term of 5 years, you can avail of tax benefit U/S 80C.
    • Public Provident Fund –

      This has been an all-time favourite and a must-have for all Indians as it helps create a retirement corpus with the best return in the debt market with a tax-free interest of 7.1%.You can maintain a PPF account with just INR 500 a year.The maximum annual contribution allowed is INR 1.5 lakhs. Principal invested gets a tax benefit U/S 80C too.
    • ELSS –
      It has a 3 years lock-in and maturity in 10 years. This is because this too gets you a tax break U/S 80C.
    • Debt mutual funds, liquid funds and bonds –
      Being inversely related to the stock market, they are known to yield better returns compared to bank FDs.


Here is the complete the Guide on How to do Planning for Your Family’s Financial Future


The top #4 ways to be mindful of money mistakes:

Managingpersonal finance for working professionals for you needs some study and interest from your side as we by now understand.

However, there are many that land up making money mistakes that can have lasting consequences of guilt of the opportunity cost lost. Let us take look at a few common money mistakes young professionals must avoid.


1) Living beyond your means>

This is the most common mistake youngsters make early in their careers with newfound financial freedom.

If you keep spending more than your earnings for long; it can make it very difficult for you to gain back financial stability.

Thus ensure you budget your expense by the 50:30:20 rule from the very beginning to live and manages expenses effectively.

2) Beware of the debt trap –

Be mindful of your spending on your credit cards or borrowing money from people to meet your flamboyant living expenses in the early years of your career. This is because there is a huge opportunity cost lost in the process.

There are people who had to take personal loans to set off their debts that ran into lakhs of rupees.

This has an adverse effect on your morale and respect as a human being and might find it extremely difficult to get back on track. Thus as described earlier, pay off your debts/ loans at the earliest.


To learn more about personal finance for working professionals like you and to have your query resolved, download the Koppr app from the Playstoreand get in touch with your personal financial planner today!

Making purchases unscrupulously

Youngsters are found to find a high in picking up accessories, latest mobile phones and gizmos, bikes and clothing continuously. They swear by the associated exchange programs too.

However, these are all depreciating assets that become obsolete soon. Thus be mindful and limit your purchases in these segments.

Rather you should aim at picking up real assets like stocks/bonds, gold/ gold bonds or even land if you can afford them as all of these will always increase in value.


Delusions about financial goals in life

There are very many youngsters who live beyond their means and/or have no savings in their accounts even if they are earning a decent amount of income.

This is because they have not spent time to understand/ define their life purpose or define their life’s financial goals.

Thus planning for personal finance for working professionals like you eludes them, leaving them grappling with their finances till late in life.

Thus start today and get your personal financial planning in place with your personal financial planner from Koppr and start your journey into wealth creation and realise your financial dreams with élan!

20 Thumb Rules For Investing

20 Thumb Rules For Investing

In this world, there are rules for almost everything. Whether you are cooking some food or playing sports, everything has some rules binding it. However, whether you follow these rules or not, that is completely up to you.

While some people think that rules are limitations to someone’s ability others think rules protect them from falling apart.

Similarly, there is the rule of investing which are followed by some investors and some define their own rules.

However, in investing, especially when you are a beginner, following the thumb rules can mitigate a lot of losses and increase your chances of making money from the market.

Here in this article, you will be reading about 20 thumb rules which are beneficial for investors.


1) Bulls and Bears make the money:

While everyone is afraid of the volatility in the markets, but this volatility can earn higher returns.

If the market is going up or down at a very slow pace, then it is highly difficult to amplify the investment. The returns are lower and also the time required is higher.

However, when there is volatility in the market and bull or bear is at its top pace, you can make money out of the market.

The terms bulls and bears describe how the markets are performing.

If the stock market is increasing, it is called a bull market and the economy is growing and is sound.

However, when the stock market sentiments are negative and the market falls with most stock prices decreasing, it is called a bear market.

For instance, the stock market index Nifty 50 at present is roaring and at an all-time high. It has reached almost INR 15900 and this indicates that the market is in a bull phase.

If you have shares of the companies that are going up, then you are bound to make a huge profit in this bull run.

However, most people invest when the market is bullish, i.e. it is rising and only a few people tend to invest when the market is falling.


Moral of the story: You need to invest when the market is volatile, irrespective of whether it is bullish or bearish. The volatile market fetches more return and a stable market.


2) Do not buy everything together:

It is the second thumb rule of investing that you must not buy everything together.

The market is going up and down all the time. So, if you buy every at once, and at the next moment, the market may go upside down and all your investment can go into vain.

Thus, you must analyse each market individually, each asset separately, and then invest.

Also, when you are buying in huge volume, there is no need to buy all at once.

You can buy the same instruments in multiple lots. This gives you the chance to wisely analyze and observe the market.

If anything goes wrong you can close your position and stop trading or investing in that instruments.

However, if you have bought in volume together, and then after some time, the market turns around, it can be sudden death as well.

Moral of the story: You can invest systematically. This would not only help you beat the odds of not investing everything together but also help you with rupee cost averaging.

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3) Rule of 72 of investing:

The rule of 72 is really interesting. Who doesn’t want their money to get doubled up, isn’t it? However, the number of years for doubling the amount is not easy to anticipate.

This rule of 72 however, helps in finding out the number of years your investment would take to double itself. Only with the help of the rate of interest and the number 72, you can find out.

You need to divide 72 by the rate of interest. So, if the rate of interest is 8% and you have invested Rs. 2 lakhs then it would become Rs. 4 lakhs in 9 years.

Moral of the story: You can gauge the time you would need to double your entire investment portfolio (in a fixed return product) with the help of the interest rate.

This would give you a tentative value of the expected pre-tax portfolio (keeping other factors constant such as the associated risks).


4) Rule of 114 of investing:

Now as you know in how many years, your money gets doubled, aren’t you feeling the urge to know the number of years it would take to triple itself? So, you can find that out using the rule of 114.

Similar to the previous rule, here you have to divide 114 by the rate of interest.

So, given the example above, the Rs. 2 lakhs would be Rs. 6 lakhs in (114/8) years = 14.25 years or 14 years and 4 months.

Moral of the story: Again, you can find out the timeframe of when your entire pre-tax investment portfolio can be tripled. However, taxes can be a significant part of your portfolio if not planned properly.


5) Rule of 144 of investing:

Similarly, you can also find out in how many years, your invested amount can be 4 times.

For this, you need to use the rule of 144 which is similar to the previous two rules.

Here you need to divide the number 144 by the rate of interest which is 8% in the example above. So, your Rs. 2 lakhs will be Rs. 8 lakhs in 18 years.

Moral of the story: Similarly, the timelines for the pre-tax investment portfolio can be quadrupled can be calculated.


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6) Rule of 70:

You seem to be happy seeing all your money doubling, tripling but here is the catch.

The amount may increase but the value will not be the same as the amount due to inflation after time passes.

So, it can eventually get halved as well and that can be determined by the rule of 70. Here you have to divide the number 70 by the rate of inflation.

For instance, you have Rs. 20 lakhs and the current rate of inflation is 4%. So, your money will be Rs. 10 lakhs in the next 17.5 years.

Moral of the story: Inflation can really reduce the real value of your investment portfolio. So, if you need to grow your portfolio, you need to factor in inflation and then grow the portfolio to your desired returns to give you an inflation-proof return.


7) Emergency fund rule:

Life is uncertain, anything can happen within even a blink of an eye.

Even if you have a lot of investments, you may not be able to use them if they are not liquid enough.

Moreover, there are penalties for withdrawing money early from your investment instruments. However, the most important factor is, if you are using your investments in the first place to deal with emergencies, you can completely ruin your portfolio.

Obvious investments are for the financial security of the future, but for emergencies, you need to have a contingency fund. This will not only help you in smoothly handling emergencies but also help you safeguard your investments.

Moral of the story: Experts suggest at least 3 months of your monthly expenses be set aside for emergency in an easily accessible fund so that it can be seamlessly accessed even by your family members.


8) Insurance planning rule:

After emergency fund, another important part of investing in insurance planning.

You may be wondering how it is within the rules of investment, then you must understand that when there is some medical crisis, or natural disaster, or anything of that sort, your investments can go for a toss if you rely on them completely.

Especially for medical emergencies, it is important to have Mediclaim policies, health insurance policies, and other insurance policies to safeguard your life, assets as well as investments.

The insurance penetration in India is very low and it is still not bought, but sold. This is where most insurance plans are also ‘mis’ sold.

However, if the story changed, and everyone ’planned’ their insurances and bought them proactively, then the entire concept of mis-selling wouldn’t even exist!

Moral of the story: Insurance is your Plan B, i.e. your family’s safety net. This is why it is crucial to plan it ahead of time so that they are not in a fix in case anything happens to the primary breadwinner of the family!


9) The 4% Withdrawal rule:

For planning a financially secure future, you need to be very particular about the withdrawal rule.

Especially if you are planning for retirement, then you must follow this withdrawal rule of investing.

It says that you must not withdraw more than 4% of your retirement corpus in a year.

For instance, you have accumulated Rs. 2 crores for your retirement. Now, going by the 4% rule, you should only withdraw Rs. 8 lakhs which is Rs. 66666 per month.

Now, there is inflation which needs to be taken care of as well. Suppose, the inflation rate is 5%. So, in order to accommodate inflation, you can also increase the withdrawal by 5% every year.

So, in the first year, you withdraw Rs. 8 lakhs, and then in the second year you can withdraw Rs. 8.4 lakhs and so on so forth.

Moral of the story: The only aspect you need to consider while withdrawing from your Retirement Corpus is to ensure that the corpus grows at a higher rate than the expected rate of inflation in order.


10) 10% retirement rule:

When you are young, you would hardly think about retirement, isn’t it?

However, if you start investing early using the 10% rule of investing for retirement, you can save a huge corpus when you retire.

Suppose you started earning right after completing your graduation at 21 years and your starting salary is say Rs 21,000. Applying the 10% rule, you can save Rs 2000 every month.

This Rs. 2000 may seem a very negligible amount, but using the power of compounding, this small amount can grow like wonders. Here is a snapshot –


Calculating retirement corpus
Current age 21
Investment amount every month 2000
The average rate of return 10 per cent
Retirement age 60
Tenure of investment 39
Total Investment

Total retirement corpus

9.36 lakhs

1.15 crores


With just an investment of Rs. 9.36 lakhs, you can build a retirement corpus of Rs. 1.15 crores.

Moral of the story: The power of compounding is the 8th wonder of the world and the advantage of investing early manifests it to a humongous amount.



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11) Rule of diversification:

One of the most important things in investment is risk mitigation and the smartest way to mitigate risk is to diversify your portfolio. Rule of diversification tells you about the correlation between the asset classes.

The correlation between the asset classes you are investing in must be low or negative.

This means, if one asset class is getting affected or going down, the other must go up or remain unaffected.

For instance, when stock prices go down or there is a bear market, the gold price usually goes up. In fact, it is also considered as a hedge investment.


If you compare the two charts above, you can understand that when the stock market was a little sluggish in 2020, the gold prices were at an all-time high.

Moral of the story: Each asset class reacts differently and thus you need to diversify using such assets that your risk of investment goes down.


12) Don’t buy damaged companies, but buy undervalued stocks:

A stock may be damaged which means it is undervalued but the company itself is damaged, which means the stocks are not worth buying. So, it is important to evaluate the company in the first place.

The stock prices can be anything in the market, you need to find out its real/ intrinsic value.

Moral of the story: If the intrinsic value is higher than the prevailing market price of the stock, buy the stock. However, if the company is damaged, the intrinsic value cannot be higher than the market price of the stock.


13) Pay taxes wisely:

There are multiple investment instruments that can help you save your taxes. Invest in ELSS, ULIP, FDs, and many others. When you are investing, you need to check the tax implications for each investment.

For instance, the profit from investment in stocks is taxed as per capital gain tax rules.

Moral of the story: Plan your investments keeping their taxes in mind, so that your real return, i.e. the post-tax income from it is high. Otherwise, your tax pay-out would wipe out a significant part of returns.


14) Make sure you do your homework:

Investing in any asset requires in-depth knowledge and analysis of the asset and the market. You can do your homework by analysing multiple resources both fundamental and technical.

Moral of the story: You can also do your research by visiting the site of Koppr. Here you can get an abundance of information and data which can help you in your financial planning and analysis.


15) Book your profits:

Greed is not good for investors. If your anticipated or targeted price is achieved, then it is wise to sell the assets and book profit.

Moral of the story: The urge of earning more may end up in losing your capital investment as well. Hence, you need to weigh the pros and cons well before investing.


16) Expect corrections, make the most out of it:

Corrections are part and parcel of investment and the financial markets. There cannot be a continuous rise or fall in the prices. If there is an excess rise, it will eventually fall and vice versa.

So, you cannot be worried about corrections. Rather, you must understand how to use them in your favour.

For instance, if there is a correction for ABC stock price, and you hold 500 shares worth Rs. 1000 each.

You bought the shares at Rs. 700 each. So, you are already at a profit of Rs. 150000. However, after reaching Rs. 1000, it started falling. Wait, do not sell all your shares. Analyse whether it is a correction or momentary fluctuation.

If the prices decrease a little, no need to take any action. However, if the prices decrease drastically, then it is better to sell the shares and wait until the correction ends.

Moral of the story: Once the price is at the lowest and again starts climbing up, you can buy the shares back. This is a very tactical investing strategy which if followed properly can be very effective!


17) Keep your ears and eyes open while investing:

The prices go up and down within a blink of an eye. You missed the update, and the price becomes different the next moment. So, it is important to keep a constant check on the market.

Moral of the story: With the help of the Koppr app, you can monitor the market round the clock. You can find all news about the markets on this app.


18) Panicking leads to losses:

When you are investing in the financial markets, you need to stop being worried. If you do panic buying or selling, you would only end up in huge losses.

Moral of the story: Markets will be volatile and that is the basic nature of financial markets. However, if you start panic buying or panic selling often whenever the prices go up and down, then your investment would go for a toss.


19) Flexibility is the key:

If you are rigid about your investments, then it becomes difficult to mitigate risks.

When one asset price is tumbling, or a company is continuously running in losses, you need to sell them.

If you are rigid and do not alter your portfolio, then you will only end up in massive losses. You need to be flexible enough to alter your portfolio whenever necessary.

Moral of the story: Reallocation and rebalancing of portfolio is the key to profitable investment if done at the right time. You need to know your ideal asset allocation and then keep rebalancing your portfolio accordingly.


20) Listen, analyse and invest:

Finally, the most important rule of investment is to listen to everyone, then analysing each point, and then acting according to your final findings.

Suppose, your financial advisor suggested one stock, your friend suggested another, and your colleague another one. You need to evaluate all three of them, also find your promising stocks.

Then analyse them all, check whether they are rightly valued or not.

Moral of the story: After thorough analysis, you need to pick the most suitable one for your portfolio. Listen to everyone, but do what you think is right and what you believe is best for you and your investment portfolio!

Rules of investing are pretty much interesting if you thoroughly read them. Following these rules are up to the investors and traders. You can choose which one to follow and which one not to.

However, these rules are for making your investments better and optimize your profits and reduce the risks.

All You Need to Know About Emergency Funds

All You Need to Know About Emergency Funds

Emergency funds as the name entail cater to sudden and unforeseen financial exigencies arising from a range of unexpected situations viz. job loss, accident, major illness, natural calamity, etc.

Thus the nature of these emergencies can be short-term or long term in nature, but the need for availability of such contingency funds is immediate when the need may arise.

An emergency fund not only helps you tide over your critical financial needs in your most difficult times; it also ensures that your investments for other long term financial goals remain undisturbed.

Such is the importance of building and/ or having a contingency fund at your disposal. But remember, an emergency fund is usually not meant to fund daily expenses of life unless emergent from unforeseen circumstances.


In this article, we will focus on all the things you need to know about emergency funds for you to plan and manage your finances prudently.

We aim to cover–

  • The reasons why you may require an emergency fund
  • Types of financial emergencies
  • The right amount of money to keep in your emergency fund account
  • How to Build an Emergency Fund?
  • Different instruments available to build emergency funds in India
  • Benefits of having an emergency fund


The reasons why you may require an emergency fund:

For all of you who have witnessed and are still experiencing the wrath of the landscape scale Covid-19 pandemic for the past eighteen months, you are sure to have witnessed the worst emergencies so far in your life, either in the form of pay-cuts, job loss, death of a family member, natural calamity, etc.

Medical emergencies, job loss and natural calamity if faced call for immediate requirement of money and here is where your emergency funds come to rescue.

You must keep in mind that your emergency fund is kept liquid in nature, such there if met with a financial crisis, you can avail of the money without delay.

Neither should withdrawal from the fund cost you an exit load or withdrawal penalty. This is the most critical feature of emergency funds that you must keep in mind when deciding on your investment vehicle to save for emergency.


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Types of financial emergencies:

Emergency savings may be required to mitigate a range of financial emergencies that can be classified into –

  • Small/ Short-term emergencies
  • Big / Long-term emergencies


Small/ Short-term emergencies entail but are not limited to –

  1. Accident of personal vehicle on the roads or breakdown at home
  2. Unplanned and emergency family travel (inter-city) to give care to a sick parent/ elderly family member or attend a family funeral
  3. Home/ office repair work to be undertaken post a natural calamity like floods/ very severe cyclones
  4. Medication and/ or minor surgery required for unique illness not covered in medical insurance policies
  5. Major robbery or theft during the journey or at home
  6. Pet emergencies/ accidents that require professional vet care
  7. Business slowed down due to prolonged periods of lockdown owing to a pandemic situation where payments are also held up


Big/ Long-term emergencies may include but not limited to –

  1. Long periods post-job loss/lay-off
  2. The medical condition of an immediate family member that requires your 24×7 attention and care
  3. Medical condition for self that may require a sabbatical from your work
  4. Major damage to house due to a natural catastrophe
  5. Unforeseen and unplanned education fees for children to ensure ‘golden career opportunities are not lost


There will still be a section of people who may feel that while the concept of emergency funds is great, and is good for all others; but you do not need one just now as –

  • Maybe you do not need to shoulder any financial responsibilities at home at the moment
  • The family is financially stable as the father is still earning and has the family finance sorted


You may also think that just in case if at all, a financial emergency occurs, you will have the credit cards that you can swipe and meet your expenses and use your 45 days interest-free period to further plan balance transfer on other cards till you tide over the crisis.

Believe you in me, when crisis strikes, it is not easy to maintain such calm and composure to calculate and play with such high interest revolving credit. You might be putting too much at stake.

You might also be thinking that you are highly skilled in a niche job; demand for which is always high in the market.

That gives you a notion that in case there is still a chance of job loss, you will easily be able to find one.

In that case, I would urge you to consider the following before you choose not to invest in emergency funds.

  • What if the country faces a major economic downturn and/ or enters into a recession and your job is no longer in demand leading to a job loss?
  • What if your company gets merged or acquired by a larger company and the department you are a part of is now redundant resulting in your lay-off?
  • What if your parent in the home country gets paralysed or becomes immobile due to a major accident and you need to travel back as the caregiver and sole companion for your lonely parent?


Yes, sooner or later in life, everyone faces financial emergencies that need serious attention and makes emergency savings a critical part of financial planning.

To understand and get further clarity on the subject, we urge you to take a quick financial planning course from Koppr to make a conscious money decision.


What is not a financial emergency?

I would also like to highlight here some of the situations that definitely does not consist of or should never be considered as a financial emergency and you must not lay your hands on the contingency fund you have created for them.

For example –

  1. You badly need to invest some money into your business for a deal you are looking forward to. This is because you should have had provisioned for future business opportunities from your earlier profits alone.
  2. You or your family member wants plastic surgery to enhance your facial beauty.
  3. Being an ardent football fan, you have got a great deal on vacation travel to watch the EURO CUP finals on 12 July 2021 and wish to avail of it.
  4. You have been invited to a destination wedding and you decide to fly at the last minute
  5. You have a sudden desire to change your home flooring to a complete wooden makeover
  6. Replace your HD TV with a high end large smart TV of the latest model to offset the inability to go to movie theatres, courtesy of the pandemic.


The right amount of fund to keep in your emergency fund account

Emergencies as we saw can come in ways more than one and can range from a big one like a job loss to a small one like your family car breakdown.

In most cases, you may have noticed that misfortunes, when they strike; strike hard and in a series – so don’t be surprised if you can have a car breakdown when you don’t have a job too among other losses/ exigencies! Whatever the situation is, you will have to ensure that your living expenses are seamlessly met even when you don’t bring home an income for several months.

And, you will still have to pay your investment EMIs, loan EMIs along with credit card dues without a worry.

You will find some extreme cases as well; where some people are seen to account for their luxuries like an annual vacation as well while planning to save for emergency, while some others trim their budgets and stick to bare-bone living expenses budget to tide over the crisis times.

So to start with, make an exhaustive list of living expenses for any month and prioritise the key (must have/ need to) expenses that you must account for to seamlessly tide of the crisis period.

You would need to take a call whether to consider one or two small ‘to haves’ in the list depending on your current financial/ job status and affordability.


Though most of the financial advisors/ planners would suggest keeping aside 3 to 6 months of your living expenses in and as your emergency fund, it will be prudent to set aside and build an emergency corpus that consists of 6 to 9 months of your living expenses.

This suggestion stems from the widespread experiences we are witnessing courtesy of the Covid-19 pandemic since the beginning of 2020.

Even the Subprime Crisis during 2007 – 2008 had witnessed prolonged periods of job loss for the salaried class if you remember.


Watch our Video on How Should You Plan for Emergencies? Prepare a Family Emergency Plan




How to Build an Emergency Fund?

Just as Rome was not built in a day, your emergency fund needs time to build gradually.

You will need to set aside a certain amount of money into a separate account every month, and soon in some time, you will find a considerable corpus built.

Wondering how much money to save for emergency? Say, the modest monthly living expenses that you would like to maintain in the face of financial exigency is INR 15000 at any point in time.

So you will need a corpus of at least INR 90000 or INR 135000 if you aim to build a provision for 6 or 9 months respectively.

You can decide on the amount you want to set aside every month towards your emergency savings depending on your choice and intent – you may choose, say, for example, INR 5000 or INR 10000 a month to build your contingency corpus.

You may choose to cut down on your ancillary expenses or even small investments for a while, to build this all-important emergency fund.


Read how to can escape the world of being broke in just 4 Steps to Start Building your Wealth Now.


Different instruments available to build emergency funds in India

Time is now to think about where to invest for emergency funds.

While deciding where to invest in emergency to build the desired corpus you must keep in mind a few things like;

  1. The fund must help you without hassle when you need it the most and must easily convertible into cash without any delay.
  2. While some emergencies give you a few hours and maybe a couple of days to get prepared, others can be ‘right here – right now’ kinds, so you must invest accordingly.
  3. Thus the investment options you decide on must be highly liquid to ensure you or even your representative/ chosen family member/ friend can access the money if and as required.
  4. The money must be easily accessible such that it gets transferred to your account preferably within the same working day.
  5. The investment avenue should get you decent returns as well.


a) A separate savings bank account:

The easiest option is to open a separate bank account in your chosen bank and keep depositing a specified sum of money into that account through auto-debit mode.

This will ensure forced saving without missing out on a monthly deposit you committed to making to save for emergency.

Below is the list of banks offering the highest rate of interest on a savings account as of 24th Jun 2021.


Bank Name Saving Account Interest Rate
Jana Small Finance Bank 3.50% to 7.25%
ESAF Small Finance Bank 4.00% to 7.00%
AU Small Finance Bank 3.50% to 7.00%
Equitas Small Finance Bank 3.50% to 7.00%
Ujjivan Small Finance Bank 4.00% to 7.00%
Yes Bank 4.00% to 5.50%
South Indian Bank 2.35% to 4.50%
Kotak Bank 3.50% to 4.00%



b) Cash in hand:

Though it is otherwise discouraged, along with emergency savings in a separate bank account, it is prudent for you to keep cash in hand in lieu of at least one-month expenses.

This is because some of the emergencies do not give time for you to go to your bank to withdraw the money or any other option.

Moreover, there can be other technical glitches like the following that can be best bypassed to a certain extent if you have some cash in hand.

    1. Failure of internet connection due to a severe storm or cyclone may not allow for digital payment/ transfer of cash
    2. System failure at the medical facility to not allow for online payments
    3. ATM machine does not work due to technical failure
    4. ATM can run out of cash at times
    5. Emergencies or hospitalisation in the middle of the night will also not allow you the scope to withdraw cash from the bank against a cheque.

Thus when considering where to invest in emergency, you must also regard keeping some cash at home.


c) Sweep-in Fixed Deposits:

You can also look at siphoning off your emergency savings into a sweep-in FD if you do not want to open and maintain a separate account exclusively to invest in emergency fund. There are two benefits to this action of yours –

    1. Your money will earn better interest than lying in your savings account
    2. You still have 100% liquidity on the money as you can withdraw the money if and when required to mitigate financial emergencies by withdrawing the money with your bank debit card and/ or online transaction without delay on a bank working day or even on a bank holiday.

However, it is important to remember that only single holding accounts are entitled to have sweep-in FDs.

This is definitely a good security measure to protect the interest of the primary account holder.


d) Liquid mutual funds:

If your emergency corpus runs into a few lakhs of rupees, then you may also look at keeping a part of the fund in a liquid mutual fund of repute.

This is because, generally a liquid mutual fund gives more return compared to a fixed deposit, especially when the equity market is on the downturn.

However, as an investor, you must also know that liquidating the money from a liquid fund can take up to one to three working days.

A certain mutual fund allows for ATM card facility to allow the investor to pull out up to INR 50,000 a day from a scheme, Example – Nippon India Mutual Fund has their ‘Nippon India Any Time Money Card.’


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While a fixed deposit has a deposit insurance cover of INR 5,00,000 on it, there isn’t any such protection available on any liquid mutual fund investments.

Thus as an investor, it will be completely your call on choosing to invest in the various tools depending on your risk appetite and decide how to manage the emergency fund on your part.


Benefits of having an emergency fund

There are several unsung benefits of an emergency fund as listed below.


a) It gives peace of mind:

Financial stress can be detrimental to health and life as the inability to provide for basic yet serious financial needs in the face of an emergency situation can be very depressing and disrespectful for the bread earner of the family.

It has been seen to create panic in people leading to loss of sense of balance and calm too.

The existence of an emergency fund gives peace of mind and psychological power to concentrate on other areas of life as you know you know you are protected against unforeseen expenses in case they arise.


b) No need for revolving credit and/ costly loans:

If you have your emergency funds in place to fall back on in the face of the short-term or long-term financial crisis, you know you will not need to swipe your credit card or take any loans to tide over the financial crisis in life.

This is because repayment of loans and interest on credit cards only adds to your mounting financial owes instead of lessening them.


c) It protects your long term financial goals –

This is because, in case of any financial emergency, you know your emergency savings will take care of your emerging financial needs.

You will not need to break any investments planned for your future dreams and aspirations.


d) Makes you a disciplined investor –

When you get into the habit of saving money in your emergency fund; you see the results in term of building a corpus for a defined purpose on one hand and the tangible and intangible returns associated with it on the other.

This is bound to give you a sense of joy and accomplishment that will urge you to invest in bigger financial goals in life through disciplined investments.

So what are you waiting for? Download the Koppr app and start your financial planning today!

7 Things your millionaire friend isn’t telling you about money

7 Things your millionaire friend isn’t telling you about money

For most youngsters like you in your twenties; experiencing and enjoying new-found life with friends partying, splurging on food and wine, gifts, gadgets, late nights and lifestyle is where the ‘highs’ of life lay.

And why not! There is a different level of adrenaline and dopamine rush to go for it more and more.

Life’s motto for most in your 20s is to ‘work hard and party harder’. Years go by without a care in the world as the money keeps flowing in to feed your wish-list of instant gratification.

Financial planning is generally not on the list of priorities for you.

It is only when you get to know from your sources that one or two of your bum-chums have become millionaires by the time they are in their late 20s or early 30s, that makes you derisive as the news seems to be a ridiculous surprise.

That is perhaps when the alarm rings in your mind and you start thinking as to where you went wrong when all were hanging in there together till yesterday.

How is it that few peers and kins are now successful and wealthy youngsters when you are still stuck in a rut with a job you enjoy or perhaps don’t and have not progressed much in your career or in money matters?

The good news is that it is not too late and you still have time. Suggest you change your mindset from ‘being derisive to being curious’ to learn and understand what your kins or bum-chums did differently to become money-wise successful early in life.

In this article today, we will focus our efforts to detail the 7 money practices that help youngsters become millionaires earlier in life which millionaire friends do not speak about.

Practice #1:


1) They budget their expenses:

Most millionaires are known to live well below their actual affordability – to the extent that you might doubt their millionaire status.

There are a large number of them who live in their ancestral homes, drive their family car, shop at thrifty Kirana/ departmental stores – looking for best deals, watching out for online deals and eating out on special occasions only.

This makes sense. Doesn’t it? None of the first-generation millionaires you see today or from earlier days, have been heard to have grown rich by spending money.

They have learnt their money lessons well ahead in life and saving and investments are things they would swear by.

These habits are worked on and developed for years and they would not barter it for any amount of luring towards anything on earth.


Mistakes Millennials make: 

While a millionaire saves first and then spends, youngsters like you do the opposite. They spend first and save whatever is leftover. If you too are making this mistake, know that you aren’t alone.

Most Millennials are found to push their budgets till they are broke. They exhaust their salaries by mid-month and use credit cards to see them through the remaining days.

Most are found to fall prey to revolving credit as they would have no clue on the interest charged on your cards, nor would you know your due dates!


Investment lesson learnt

Make a monthly budget. Draw an excel sheet with a detailed list of monthly earnings and expenditures for every month.

Your monthly expenses ideally should consist of repayment of education loan, living expenses including rent, groceries, utility bills, local conveyance, medicines and miscellaneous expenses.

Ideally, your miscellaneous expenses must be restricted to a lower percentage of your living expenses, rent and loan repayment combined.

However, if it is otherwise, you need to take a hard look at how you can make adjustments to cut costs as the first step to financial planning.

For example, some millennials love to begin their workday with a Cappuccino from Starbucks that costs INR 300. With 22 working days in a month, it adds up to INR 6,600 monthly expense!

If you stick to this habit for 30 years, your opportunity cost lost will stand at INR 11.40 lakhs. Surprised? This is because just INR 500 rupees monthly investment in a systematic investment plan (SIP) for 30 years could earn you INR 11.40 lakhs return at a modest 10% compounded annual return.

Whereas you can make your favourite cappuccino at home for just about INR 7 a day!

In fact, if you are yet to get married and shoulder minimal financial responsibility at home, then you should follow the 50:30:20 rule on your take-home salary for effective money management.

Here is the breakdown for you –

  • 50% of the money should go into loan repayment, rent, utility bills
  • 30% into savings and investments
  • 20% on discretionary spending as desired


Here is the complete article on How you can invest using a Budget or with less money as well

Practice #2:

2) They pay off debts aggressively

All young millionaires around you know that you pay as high as 40% interest on your credit cards in India.

No legal investment gives you this high returns on your money!

Your educational loan too does not come cheap. The interest rate hovers around 10% and 14%.

Thus they pay off their debts aggressively. This is because money saved on interest is money made.


Mistake Millennials make: 

Most of you love flashing your credit and debit cards when partying with friends.

Middle of the month when your pockets run dry due to high lifestyle expenses, it is this plastic money that helps you fulfil your desires.

This leads you to live beyond your means and you like most of the youngsters get into the vicious debt trap laid by the banks.

And you keep wondering that though you are paying your ‘minimum amount due’ every month, why is the actual amount due not going down?

Maybe you are also borrowing money from your successful friends too – thus increasing your burden of debt.

All these and more eat into your disposable income which you could have fruitfully invested towards your wealth creation.


Investment lesson learnt:

Arrange to aggressively pay off your debts/ loans.


Few steps to follow –

  1. Take a stock of your total outstanding debt in the market.
  2. Check for the balance overdue and interest rate for each credit card
  3. Take a stock of outstanding loans in the market like educational and personal loans
    1. Check their interest rate and term
  4. If required use a Debt Pay-off Calculator freely available on the internet to see by when all your debts will end.
  5. Give the banks auto-debit mandate basis calculations on point no. 3 for clearing all possible debts at the earliest date stipulated by the calculator.
  6. Stop using the cards for the time being. Revisit your budget vs. expense sheet to check where you can cut your expenses without majorly harming your living for the month.
  7. As and when you receive and extra income in the form of gift money, incentives, bonus, extra income from some source, interest on the maturity of fixed deposits, etc., ensure you use the whole money to check for any outstanding debt anywhere and use it to pay it off for good and also divert some amount to create an emergency fund and other important goals.


Remember interest saved is equal to money made. This will increase your disposable income.

Also remember that outstanding credit or EMIs missed or failed to pay off debts, etc.; all add up to your bad ‘credit score’ which will act as a deterrent when/if you wish to avail of any loans, like a home loan, even years down the line.

Next steps:

  1. Keep a maximum of 1 or 2 credit cards. Use only 1 of them. Keep the other away for emergencies only.
  2. Set a reminder on your mobile phone/ desktop calendar for you to ensure you pay off the total outstanding for the month at one go on or before the due date.
  3. Use the credit card for payments only in an emergency or when on business travel.
  4. Use cash to make your payments most of the time. Hard cash going out of your hand has a psychological impact on making you cautious of the money spent.

This is one of the most important money lessons for any youngster like you.


What every Indian in their 20s should know about their money? Read complete article here


Practice #3:


3) They have done their financial planning

All ‘financially successful’ youngsters in their 20s you see around you; know their financial needs and goals to ensure effective money management.

They have done this with the help of professionals who are adept at financial planning for beginners.

Once the financial planning is done; there are enough options of investment for beginners to choose from best suited to achieve their financial dreams.

Hence efficient allocation of funds following the 50:30:20 rule can easily be achieved to cater to all needs with élan. And they can peacefully devote their time and energy to work for career development and growth.

Mistake Millennials make: 

For the large number of youngsters in their 20s, financial planning seldom features in their priority list.

Realisation perhaps dawns only when they face untimely personal exigencies like death or disease of the earning parent(s) or in the face of their marriage when they suddenly realise they need to shoulder all financial responsibilities of the family going forward.

They are seen to grapple with things having lost their peace of mind.


Investment lesson learnt: 

Procrastinating financial planning leaves your dreams for the future compromised and you will not live enough to regret it. To complete your financial planning today.

To plan your finances best suited to your needs, you will need to assess and consider various parameters ranging from your age, financial dreams/ responsibilities, life stage, time to maturity,  investment capacity, risk appetite, etc.

Yes, we agree that financial planning for beginners can look confusing at the beginning.

Thus we urge you to take a quick financial planning course at Koppr to get empowered with the required knowledge on the subject.

In case you need further clarification, feel free to connect with our experienced team at Koppr.

Here’s a STEP by STEP process to create a financial plan for yourself



Practice #4:


4) They started investing early towards their financial goals

Successful millennials make choices differently compared to their peers. Instead of spending mindlessly on things of little value, they choose to embark on their journey into investments for beginners early in life to become millionaires by the time they are in their 30s.

They learn about the financial planning for millennials and make equity and equity-related vehicles their best friends to invest in. This is simply because you have time on your side. And time is money.

Time has the power to compound money and make it grow exponentially in the long run.


Mistake Millennials make: 

Most youngsters like you are found to either be scared to invest, remain in two minds or invest too little.

Even if you manage to overcome the unreasonable fear of the equity market and have designed a nice investment portfolio, if you do not save/ invest enough; going along with your dream to become a millionaire will remain unfulfilled for sure.

After all, ‘a penny saved is worth more than a penny earned.’ There are many high earning people around who still struggle with their money and lack even a decent bank balance.

Again there are many who have been known to have accumulated a decent amount of wealth with just good income levels.


Investment lesson learnt: 

Procrastination has many perils you won’t live enough to regret. So start investing today.

Even if you begin with tiny amounts, you will be surprised by the substantial wealth you have created over a period of time.

This will any day be phenomenally greater than never to have started investment at all. Let us take an example for a better understanding.

Example: Say you wish to accumulate INR 2 crores by the time you are 60 years old; i.e. 35 years from now. You have 2 options with you.


Option 1:
Starting at 25 with a modest 10% compounded annual return you will need a monthly investment of only INR 5500 to achieve your dream INR 2.11 crores wealth in your account (with a total investment of INR 23, 10,000 over 35 years).


Option 2: But if you start saving say at 30, with the same 10% compounded annual return you will need a monthly commitment of INR 9500 for 30 years to achieve the same dream amount INR 2.17 crores (with a total investment of INR 34, 20,000).


Thus the cost of waiting for just 5 years will cost you INR 9, 10,000 (39% more) to achieve the same targeted wealth!

This is an example of the magic of the power of compounding when you have time on your side. Worried about your opportunity cost lost?

Get in touch with your personal financial planner by downloading the Koppr App and start your investments today to maximise your wealth too!


Watch the video on power of compounding



Practice #5:


5) They have secured their basic needs

Even before you commence your financial planning, you must first secure your life for your family members with health insurance and a term life insurance cover.

Your successful friends are aware that any insurance policy; whether it is on health or life, comes really cheap when you are younger and enjoy sound health.

These assets get costlier with age and deteriorating health.

Ever rising costs of medical treatment and rising uncertainties of life in terms of death, disease and disability; make a health insurance policy for self/ family and an adequate life term over on self absolute must help to ease the financial burden in the face of exigencies.


Mistake Millennials make:

Most of the youngsters in their 20s feel that you are too young to consider a health and life cover for yourselves.

In fact, you realise the need very late in life when either you see a family member/ friend suffer financially for the want of money due to the untimely death of the bread earner, or when you face financial crisis in the face of medical exigencies for yourselves.

Worse case scenarios observed today are that realisation dawns when millennials in their mid-30s have become obese and/ or developed some lifestyle a disease that makes purchases of a health and life insurance policy really expensive in your pockets.

Sometimes insurance is also denied for diseases you harbour! Have you measured your opportunity cost of waiting too long?

Buy unbiased health insurance to secure you and your loved once from Koppr


Investment lesson learnt:

If you have realised the opportunity cost of not covering these basic needs, consult your financial planner today on Koppr App and get the best-suited plan for health and life insurance, without any further delay.

This would make you a responsible and respected youngster who stands tall to protect your loved ones financially in the face of health and life exigencies in future if any.


Practice #6:


6) They use tax-savers to the maximum limit:

Young millionaires are known to be prudent enough to understand and maximise usage of tax-saving instruments to the maximum limit to optimise their returns.

They understand that tax saved is money earned.

Hence you will see that their EPF, PPF and NPS accounts are optimally fed to build their long term retirement tax-free/ efficient corpus. These investment options are also known to yield the highest interest among debt instruments.

They also optimise their 80C and 80D tax benefits with investments in Equity Linked Saving Schemes and Health Insurance plans respectively, repayment of interest on Education loans gets them to benefit u/s 80E, and interest on home loans u/s 24, among others.


Mistake Millennials make:

Youngsters in their 20s like you are known to be impatient and mostly lack interest in learning about avenues to save maximum tax to optimise returns even on debt instruments and/ or assets they can invest in.


Investment lesson learnt: 

Talk to your HR and/ or your financial advisor and learn all the ways and means you can use in a financial year to save the maximum amount of tax and optimise your returns.


Practice #7:


7) They are always in search of avenues of extra income

Your successful friends have an insatiable thirst for alternate sources of income to add to their earnings and wealth creation.

They pick up weekend consulting assignments, contractual projects, and/ or work gaining an audience in the areas of their expertise on social media by sharing knowledge/ skills. Yes, ‘Audience’ is the new currency today.

To be able to have a sizable audience on social media as an influencer by captivating people’s attention gives them the ability to generate sustainable income. This empowers them to even ‘make money while they sleep.’


Mistake Millennials make:

While most Millennials are energetic about the work they do, they may not be diligent or persevering in nature in most cases.

Most get swayed into ‘work hard-party harder mode’ – thus losing out on the opportunity or the willingness to put in the extra effort to use their knowledge and skills to generate extra income.


Investment lesson learnt:

Opportunities and scope are endless for the youngsters with the right attitude/ intent, knowledge and skillsets.

You just need to open your horizons and find out those avenues of making more money to help you fulfil your dream of becoming a millionaire too.

So what are you waiting for! Contact Koppr and start investing today.


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How to Invest With Less Money or Within a Budget?

How to Invest With Less Money or Within a Budget?

While financial freedom excites every youngster when in your early 20’s, financial planning or wealth creation is generally found to be mundane at this age.

Rightfully so because your focus then is mostly on repayment of debts like educational loans, managing living expenses, discovering newfound city life, partying with friends, buying gifts for loved ones, latest gadgets and accessories, etc. The wish is to live life king-size with newfound financial independence.

Flashing of the plastic money shimmering in the wallet gives a different high to most at your age too. In the process, some of you tend to go overboard and spend beyond your actual income at times.

This is simply because living on a budget is not thrilling at all. Result? You land up making money mistakes and the consequences could be draining and long term. The wrong notion about financial freedom may lead you to this situation.

Financial freedom has different degrees to it; the most coveted one is when you have enough money to cover all your living expenses without you having to work for it anymore.

You are free to do what you feel like doing without worrying about earning money to meet your ends.

Naturally, other than those born with a silver spoon in their mouths and with large inheritances, most of us will mostly spend all our lives accumulating such kind of wealth, if at all.

However, the brighter side of the story is that you can still achieve a decent degree of financial freedom well ahead in life and feel liberated if you start saving and smart investing with small budget in your early 20s itself.

Yes, you do not need a huge income to have spare money to set aside for savings and investments aimed at wealth creation. Just start investing with little money as a habit every month to accumulate a decent fortune over a period of time.


Is it Possible to Invest with a Small Budget?

This is possible because you have time on your side. Remember- ‘all investments are like little children; they grow better with time.’

Time has the power to help your money grow and compound itself to accumulate your much-desired corpus over periods of 7, 10, 15, 20, 30 years; in short, in the long run.

There are various investments for beginners that can help you build extraordinary wealth in future even if you start with disciplined small investment ideas in your early 20s.


But is it really important to Invest? I am so young!

Till about four to five years ago, young performers at the workplace could vouch for good job opportunities in the market and yearly salary increment as well.

However, over the past few years, the Indian economy is not doing well resulting in a crisis in the job market that has been made worse by the Covid-19 pandemic.

While youngsters are finding it difficult to get a suitable first opportunity for themselves, the youth in their 40s and above are losing their jobs and are being replaced by resources at a lesser cost.

To top it all, the past year and a half has been the havoc job loss in India contributed to by the ongoing pandemic. This has left the salaried class shaky in terms of career and income opportunities irrespective of their ages.

This makes financial planning and investments in your early 20s crucial to make sure your money works for you and help you tide over any unforeseen financial exigencies in life.

Just before beginning with the invest, ask yourself this 5 Questions for Personal Financial Planning

What should I do then? How to invest in 20s?

There are options galore for investment for beginners. So start investing with small investment ideas / options having clarity of your financial goals. This will ensure your wealth accumulation simultaneously with an increase in your income.

However, before you do those, you need to put some checks and balances around few things –


Check #1:

Track your Credit Cards: Even before you prepare your monthly income vs. expenditure statement, you must take a look at the bunch of credit cards you use. Do you have an account on how much you spend on each one of them?

What are the payment cycles for your cards? Are your cards clear of their debts? Or have you fallen prey to revolving credit?

Are you aware that you pay interest rates as high as 40% on your cards in India?

No investment assures you that high returns ever. Thus paying off your credit card debts will ensure you have this valuable little money at hand to invest and make it work for you every month.


Mistake to avoid:

  • You do not need so many credit cards – it is just a feel-good thing. It is prudent to keep just one credit card for travel and the convenience of payment.
    • Ensure you set a reminder on your cell phone to clear your credit card dues on/ before time every month.
    • Auto debit mandates make payment of credit card and all other utility bills seamless and prevent any late fines/ interests.


Check #2:

Do I budget my expenses: While we agree that there is no thrill in living on a budget, we know that the benefits associated with making a budget outnumber an otherwise habit.

Thus make a list of your income and expenditures for a month. The difference will give you the amount of money saved. If your monthly “miscellaneous” expenses are as high as the sum of your loan repayments, rent and utility bills, groceries, medicines, etc., then you should definitely take a closer look at the former list to check for items you can live without to divert the amount into a fruitful investment for beginners.

Remember, if you are single with little financial responsibility at the moment, you should ideally follow a 50:30:20 rule.

Those who achieve financial freedom early in life have been seen to wrap up their complete living expenses within 50% of their monthly income.

You should ideally save/ invest at least 30% of the income and can look at spending the remaining 20% per your free will!


Mistake to avoid:

Most millennials have no concept of savings in their scheme of things. They spend their money on free will without a thought for tomorrow. By the middle of the month, their accounts run dry in many cases.

Credit cards and loans see them through the rest of the month. Hence they have no money to save/ invest for the future.


Check #3:

My Basic Needs: Smart investing with small budget is the key when on a budget. So if you are wondering how to invest in 20s, then you must first consider investing in a health insurance plan and a term life insurance plan before thinking about anything else.

This is because the younger and healthier you are, the cheaper these policies are in your pocket.

With age and deteriorating health, both these investments in insurance get expensive for the nature of the investment.

Going through the ongoing Covid-19 pandemic must have made it clear why having a health insurance cover is a must for both the young and old.

The unprecedented rise in health care costs makes health insurance a must-have irrespective of where you are in the country and even if you are covered to an extent by your current employer.

A 5 lakh cover will cost anything between INR 3000 and 7000 a year (comes to INR 8 to 19 per day) for a Gen-Z in their 20s (source policy

You must also consider taking a life term cover of at least 22 times of your annual income in your twenties as permitted by IRDA to protect your loved ones from any financial burden in the face of uncertainties like death, disease and disabilities.


Mistake to avoid:

Millennials and Gen-Z have this notion that they are too young to get health insurance and/ or life insurance coverage on themselves.

They do not think about it till such time they either get married or are required to shoulder serious family responsibilities due to the untimely demise of an earning parent(s).

Thus it is strongly advised that if you feel responsible towards your parents and/ or planning a family shortly, book your Insurance Planning appointment with Koppr today!

This would save you and your loved ones from financial distress in the face of any exigencies.


Check #4:

My financial goals: Planning any investment for beginners requires an understanding of the financial goals of the investor. So what are your financial goals?

Most youngsters are seen to invest in an off the shelf retirement plan as their first investment without putting much thought into it.

Remember if you are on a budget and wondering how to start investing with very little money for you to choose the best investments for low budget; you will need to consider various parameters that will help you determine your financial goals and make a financial plan best suited for you.

These parameters can range from your –

  • Age,
  • Life stage – single or married, with/without a child,
  • Financial dreams you wish to achieve in life,
  • Timeline you have to see your dream come true,
  • Investment capacity and
  • Risk appetite, etc.

Mistake to avoid:

Not having the ‘big picture’ of your life defined is one of the biggest mistakes youngsters make in their 20s, simply because ‘you will have to see the ball to hit it’ towards your destination.

A clear roadmap of life goals helps to plan the finances judiciously, even if the budget is small to start with. Achieving any milestone takes a lot of effort and focus.

To help you plan your finances and your financial goals/ needs, learn about easy financial planning. For further query and support, we will be happy to help you.


Check #5:

Create Emergency Fund: If you are reading this article you are definitely lucky to have survived the ongoing landscape-scale global crisis created by the Covid-19 CoronaVirus.

Goes without saying you have realised how uncertain life is.

So is work and career. Thus to mitigate unforeseen financial exigencies arising out of medical contingencies, job loss, etc., an emergency fund will surely come to the rescue, especially if you have education and/ or other loans on you.

You should ideally have about 6 months of salary in your contingency fund. To build this fund you would just need to siphon off a part of your monthly salary through an auto-debit mandate into a separate account for a chosen period of a few years.

Recurring deposits and FDs too are often used to build emergency funds to tide over future financial exigencies.


Mistake to avoid:

Youngsters in their 20s are generally in denial of any emergency/ exigency that they may face. It is as if for the rest of the world, but not them.

As a result, they would choose to spend more money in wining and dining out or splurging on upgrading the latest gizmos.


So whenever you have a strong urge to update your gadget or give in to impulse buying, because it is a ‘cool thing to do/have’, we urge you to Stop. Step back. Think. Act. i.e. Stop before making the final decision.

Step back and think whether you actually need the thing. What is at stake if you don’t own it? Can this purchase be deferred? Then Act judiciously and with maturity.

Having said that, it is natural that a youngster like you will still get influenced by friends when you see them splurging and spending money and partying in the name of enjoying life.

But if your objective is to achieve financial freedom earliest in life, you will need to act differently.

That will help you lay the foundation for a brighter financial future compared to others in your batch. Remember you will still have at least 20% of your income to spend the way you want!

Read our 5 top reasons on Why you should start investing in yours 20’s.


Earning Rs 30,000 Monthly? Here’s How to Invest & Plan Your Money with Rs 30,000 Monthly



How to start investment with small amount?


1) Choose Risk for Return

There are various options for investment for beginners. Given you are in your 20s, you have time on your side.

Time is the most important ingredient that can help your money multiply manifold if you choose to invest in equity or equity-related instruments. These instruments are known as ‘high risk – high return’ vehicles that are known to build wealth over time as they are capable of beating inflation, unlike most of the other debt instruments.

The best thing widely appreciated about Gen-Z and late millennials is your risk-taking capacity and your desire for continued learning and application.

Whether in making a career choice or otherwise, your risk appetite is generally much higher than in earlier generations. Moreover, you would be mostly single with lesser financial responsibilities, maybe just wedded without a child at the moment.

Thus investments in equity and related investment options would make an ideal choice for you.

These investments can comprise direct equity/ stock/ shares, equity mutual funds, ETFs (exchange-traded funds), SIP in stocks and mutual funds compared to low earning debt instruments.

SIPs (systematic investment plan) in equity mutual funds can be your first best bet.


Let us take a look at a scenario to check how allocating a budget on mutual funds can help you in your wealth creation.


Scenario #1:

Recurring Deposit vs. SIP Say, you invest INR 2500 in a Recurring Deposit in a bank for 10 years, earning you a 5.5% ongoing interest rate.

So total monthly investment would sum up to INR 3,00,000 in 10 years that will earn you a total interest of INR 1,00,048 at maturity. The total maturity amount would be INR 4, 00,048.


Refer to the table below.

RD vs. SIP Recurring Deposit SIP in Equity Mutual Fund
Instalment amount INR 2500 INR 2500
Term of investment 10 10
Term to maturity 10 10
Rate of interest/ Return 5.5% 10%
Total amount deposited INR 3,00,000 INR 3,00,000
Total interest/ return earned INR 1,00,048 INR 2,16,000
Maturity Amount INR 4,00,048 INR 5,16,000


On the other hand, if you invest the same amount of money for the same term to maturity in an equity-based mutual fund as an investment for beginners, your total yield would stand at INR 5,16,000 at maturity.

Return considered is at a modest 10% where on average the return varies between 10% – 12% compounded annually.

The good thing about any SIP is that irrespective of the market fluctuations, the law of average gets applied to your investments to get you above-average returns from the market.

This surely makes SIP a much better choice of investment for beginners.


2) Choose Long Term

Given the fact that you are in your early 20s, it is natural that your financial goals like children’s education, purchasing a second home or an expensive car, a luxury vacation and retirement are more than a decade(s) away.

In fact most of the times it is seen that the goals are not very clear among youngsters of your generation.

In this scenario, if you want to know how to start investing with very little money, we would strongly advise you to think long term as none of the aforesaid financial goals are likely to surface before 7 to 10 years and beyond.

The advantage in this is that your money will get enough time to work for you in generating wealth/ corpus to your satisfaction while you can pay attention to your career development, nurturing hobbies, among other things.

You just have to ensure that you never give up on your habit of saving and investing a budget on mutual funds. Yes, SIPs in mutual funds and ETFs are excellent ways to generate wealth for those with limited knowledge of stocks and other equity investments.

You have a diversified portfolio managed by dedicated fund managers that helps you minimise your risk even though you are exposed to equity-related investments; only because you have chosen to invest for the long term.

Refer to the table below.


Scenario #2:

Say you are 20 years old today. A SIP of INR 2500 in an Equity Mutual Fund for 7 years at the rate of a 10% return yields a return of INR 3, 05,000.

However a SIP for 10 years gets you a return of INR 5,16,000; and the same fund, if kept in the fund for 20 years without further feed, maturity amounts to INR 13,98,000, against an INR 3,00,000 investment.

And, say if you feed your same SIP for 20 years at the same rate, and leave it in the fund for 30 years from today, your corpus stands at a whopping INR 51,82,000 against an investment if INR 6,00,000 only. Such is the power of compounding!

Isn’t this magic unfolded!

SIP in Equity Mutual Fund SIP in Equity Mutual Fund SIP in Equity Mutual Fund SIP in Equity Mutual Fund
Age Age 25 years Age 30 years Age 40 years Age 50 years
Instalment amount INR 2500 INR 2500 2500 2500
Term of investment 7 10 10 20
Term to maturity 7 10 20 30
Rate of interest/ Return 10% 10% 10% 10%
Total amount deposited INR 2,10,000 INR 3,00,000 INR 3,00,000 INR 6,00,000
Total return earned INR 95,000 INR 2,16,000 INR 10,98,000 INR 45,82,000
Maturity Amount INR 3,05,000 INR 5,16,000 INR 13,98,000 INR 51,82,000


Best part of such investment for beginners and others in general is that it provides you with the liquidity to withdraw money against units as required without having to break your investment.

With investments in multiple SIPs, you are sure to get enough support to fulfil your goals or wealth creation for various long term financial goals in life. SIPs in ETFs to yield good returns.

And did I also tell you that you can start a SIP with only INR 500 a month! Isn’t that a great opportunity to start investing today!

As your income increases or you get incentives and annual performance bonuses, you can also start buying a few stocks of companies that are fundamentally strong; as they too are known to accumulate wealth over long periods of time to help you live your long term financial dreams.

Remember equity investments yield the best return in the long term.

However, you should not invest and forget about these investments. Rather you must keep a track of your investments and consult with your financial advisor from time to time to review your portfolio as the market fluctuates between high and low.

Sometimes you may need to reallocate your funds between stocks, funds and bonds to maintain and safe keep your returns.

You can learn more about financial planning and ways to monitor your investments download Koppr app on Playstore


Learn more about the power of compounding


3) Tax saved is money made:

In case you are a risk-averse person and/ or have some financial goals to achieve within 10 years, then there are various debt and equity-related instruments to invest your money in.

It is wise to choose instruments that will also help you save on your annual tax burden. A few of such investment for beginners is –

  • Bank fix deposits – it earns you an exemption amount invested U/S 80C if the term is 5 years.
  • Public Provident Fund – it can be maintained with a minimum annual investment of INR 500. It has maturity after 15 years but there is liquidity after 7 years. Principal invested is tax-efficient U/S 80C and gets you about 7.1% tax-free interest.
  • Equity Linked Savings Schemes (ELSS) – a tax-efficient mutual fund option with maturity in 10 years. It has a lock-in for 3 years as it is tax-efficient U/S 80C.
  • Debt mutual funds and bonds – they generally get you better returns than bank FDs and perform best when the equity market falters. This is because the debt and equity market are inversely related.


All these make it obvious that there is no foolproof method to wealth creation. However, in order to build wealth in the long run, you need to be disciplined and keep investing/ saving regularly, even if the amount is small to start with.

You also need to have basic knowledge of financial planning and financial instruments to enable smart investing with small budget on a regular basis once you have a solid action plan.

This knowledge will support you to consult with your financial advisors and engage in knowledgeable discussions around your investments so that over a period of time you will be in a position to manage and monitor your investments independently. No need to get any formal degree in financial planning for that.

However, to enhance your knowledge of financial planning, you can just spend some time on the Koppr app and do a quick online course on Relationships and Finances to kick start your journey towards building wealth right from your 20s.

Find latest banking and finance news including stock news insurance news, personal finance and more only on Koppr App. Download Now!


Escape the World of Being Broke in Your 20’s & Become Extraordinary with these 4 Steps

Escape the World of Being Broke in Your 20’s & Become Extraordinary with these 4 Steps

Wealth creation is usually not on your priority list when you are in your twenties. More focus lies on career building, exploring new restaurants, enjoying party life and paying off the student debt etc.

The twenties are the time when you ‘make many mistakes and learn’. These could be financial mistakes also. The most common mistakes are spending beyond your means, living off your credit cards and not tracking your money. When you are in your twenties, living within a budget is no fun.

But it’s surely better than finding yourself in a financially stressed situation later in your life.

As you are in the early days of your career, you may think your income would not be sufficient to save for the long future. You have debts to pay off and you need to take care of living expenses which would leave you with little money to save.

But, do you know the twenties are the perfect time for you to build wealth? Because you have time by your side.

Time has all the power to grow money. No matter how little you save, you can build a significant corpus for the long-term when you start investing it in your twenties.

Saving in your twenties inculcates the disciplined saving habit in you which sets your finances on track for the future years. Time helps your money grow with compounding effects.

Before we move ahead to know how to get extraordinary in building wealth in your twenties, let’s first understand the common mistakes that millennials make during their young age.


Common mistakes that you make in the 20’s

1. Spend more on lifestyle upgrades

What most of us look up to in our twenties is keeping up with the people around us. We feel everyone else is having a good life, spending more on lifestyle.

Not creating a budget and spending plan is one of the biggest that you make in your twenties.

What to do?

Have a clear money budget for the month and track it properly. You can have a clear idea of your spending habits. This is how you will figure out where you can save. You can also use any money apps to keep a track of your spending as well!

2. Excessive use of credit cards

Credit cards surely provide financial flexibility and are a valuable tool if used wisely. In your twenties, you would prefer a credit card for every expense and shopping as it comes in handy, easy access to money.

Not using credit cards wisely and piling up debt due to this is one of the biggest mistakes that you make in your twenties.

Did you know? Credit cards have the highest ever interest for not paying on time!

What to do?

Limit your credit card usage to a maximum of 50% of your monthly income so that you can easily repay it on time.


3. Not having adequate insurance

When you are young and healthy, it is quite common to go without life insurance and health insurance coverage. Many millennials and Gen Z buy insurance only for the purpose of saving tax instead of understanding the product completely.

Not having adequate insurance coverage, both life and health insurance is one of the biggest mistakes that you make in your 20’s.

What to do?

It is important to know that any health emergencies can make a dent in your pocket and deplete your savings.

If you are financially responsible for anyone or plan to have a family in the recent future, opt for a life insurance plan immediately.

Not having adequate life insurance coverage can leave your family financially disturbed.

Book your Insurance Planning Appointment with Koppr today!


4. Starting a family without any financial plan

Many people get married and start a family without any proper financial plan, which is one of the major financial mistakes that they make in their early life.

Wedding, pregnancy and raising a child requires proper planning on a financial front.

What to do?

Download the Financial Planning Guide from Koppr today. If you have any queries, do feel free to reach out to us.


5. Not setting financial goals

Achieving any milestone in your life takes a lot of time and effort, which requires you to have a clear roadmap for the same.

Not identifying and setting up a financial goal may you leave clueless about your future. If you have to buy your dream car, home or for your later years of life, it is important to be focused today.

Not having a clear goal is a major mistake that you can make in your early earning life.

What to do ?

Plan your finances by choosing your Priority and Life Goals.


6. Not creating an emergency fund

Unforeseen emergencies can pop up anytime during your life. It could be any medical emergency or losing a job, etc. As soon as you start earning, it is important to set aside money for emergency purposes.

However, most people do not understand the importance of creating an emergency fund. This mistake of not creating an emergency fund can land you in debt traps and financial distress.

What to do?

Keep a minimum of 6 times your monthly expenses as your emergency fund.

It is a natural human tendency to get influenced by peers.

All you see at that age is people around you of the same age spending more money and focusing more on career and relationships.

If you want to become extraordinary and build wealth for your future, you need to choose your own path. All you need to have is a strong foundation to start building wealth when you are young.

You can be an extraordinary investor just with these four crucial steps.


Here is the The Ultimate Beginner’s Guide to Invest & Grow Your Money in 20’s. Read Now!


Four Steps to Start Building Wealth Now

Step 1: Make risk your friend

Be it a career or your financial life, the twenties are the age to let yourself free to take some risks.

Some of you would have just started your career and are single or some of you would have just got married and started a family. As you would have little or no responsibility on your side, it’s a perfect time to take risks and explore what the world has to offer for you.

When it comes to your personal finance, investing in your twenties gives you the benefit of time and compounding which allows you to take risk as the downturn if any can be covered over the long term.

It would be ideal to allocate a significant amount of your savings towards high-risk and high-return potential investment products like equity mutual funds, stocks and exchange-traded funds etc. instead of investing in low-risk conventional investment options.

Let’s take examples to understand how taking a risk in your twenties helps you in building wealth over the years.

Scenario 1:

Let’s say you are investing INR 3,000 per month in a bank recurring deposit for 10 years. Let’s assume the recurring deposit offers you an interest rate of 5.5% p.a.

Your total investment into a recurring deposit account would be INR 3,60,000 over 10 years and you would be earning a total interest of INR. 1,20,000 on your investment.

That means the total value of your investment or the maturity amount of your recurring deposit would be INR 4,80,000.


Scenario 2:

Let’s say you are investing INR 3,000 per month in an equity mutual fund through a systematic investment plan route for the next 10 years.

That means, your total investment would be INR 3,60,000 over 10 years. Let’s assume, with many market cycles equity funds deliver a return of 12% CAGR, you would be earning a total of INR 3,37,017.

That means, your total earnings would stand at INR 6,97,017.

Let’s say you continue to invest in a systematic investment plan for 20 years, you would invest INR. 7,20,000 and your total investment value would be INR 29, 97,444 at the end of 20 years assuming the fund continues to deliver the same rate of return.


Step 2: Invest for a long haul

When you are in your twenties, your goals may not be very clear to you. You may be sure about certain goals such as buying an expensive car when you are thirty or you are sure to go on a luxury trip in the next five years.

Certain long-term goals like when would you exactly need money for your children’s higher education (especially when you are single or newly married), when would you want to retire, etc.

Millennials today may also be facing uncertainty in the job market. However, this should not stop your habit of investing.

The best way to invest in your twenties is to invest for the long haul, which is for your goals that are decades ahead.

In this investment strategy, you may miss out on excessive gains, but you would be able to earn modest gains without being affected by any short-term fluctuations in the market.

It is important to understand that the market always fluctuates between good and bad. When you constantly track the market and accordingly buy/sell, then you are most likely to be hit badly by the market downturn.

If you are investing for the long haul, you will be able to ride out a down market more effectively. This does not mean; you should invest and forget for decades.

Constant review and pruning your portfolio is also important alongside keeping your long haul investing strategy.

For example, you have invested in a stock that was doing good and had good potential for the future. But fundamentals of some stocks can turn out to be weak. Irrespective of the market condition, it is important to get out of such stocks and revise your portfolio.

However, while you are investing it is important to choose the right type of stock, mutual fund or any investment product with a thorough understanding of the specific investment option.

You can do your own research or seek expert advice while investing.


Step 3: Learn to live within your means

To successfully live within your means of attaining financial freedom, you need to have financially responsible behavior.

To start with, you must know what your means are. You need to understand the income flow and then list out your expenses, both fixed and variable expenses. This means you need to create a clear budget and spending plan.

You need to also effectively follow your plan and stick to it. To grow serious wealth, you need to resist the urge to spend more and learn to live within your means. Do not blow your income on lifestyle upgrades.

You can choose a 50-20-30 plan for your monthly budget. This means, 50% for your fixed expenses such as house rent, grocery and other essentials and utility bills, etc.

Keep 20% of your income for variable expenses which could be for shopping online, entertainment and dining, etc. The remaining 30% of your income must be strictly utilized for savings and investments.

Adhering to this budget plan can help you save significant money and build wealth over the long run.

Enroll for our Mutual Funds course for FREE and see how you can build a wealth effectively.

Here are few good practices for you to live within your means:

1) Use a credit card wisely

A credit card is the most convenient form of interest-free credit available. If you use it wisely, you can enjoy its benefits without getting trapped in debt.

Do not rely on a credit card for all your living expenses and use it whenever it is necessary and beneficial.

Time your credit card purchases and pay your bills well within the due date.

Know a host of discounts, rewards and cashback available for your credit card to take the benefit whenever possible.
Using a credit card wisely and managing the repayment well can help you live a financially peaceful life.


Check this video out to Know why You should Own a Credit Card



2) Resist yourself from spending on materialistic things

Spending too much on expensive materialistic things early in your life holds you back from becoming a wealthy person in your 30’s or 40’s. Hence resist the urge to spend on expensive things.

For example, purchasing an expensive bike might be first on your list as soon as you start earning. Instead of going with the urge, if you wait and save for the same to buy after some years would be a financially great move.


3) Set aside an emergency fund

Setting aside money for emergencies will create an emergency fund. With this, in any unforeseen circumstances, your budget is not disturbed and the savings are not depleted.

This emergency money will allow you to pay your emergency health bills or help you live for a few months in case you lose a job, without hampering your existing savings and the monthly budget.


4) Boost your income

If you aim towards wealth creation and becoming rich, you need to focus on the opportunities to boost your income which will help you save more.

Better paying career opportunities, passive income-earning opportunities and focus more on the professional skills that can earn you extra money.

Having multiple streams of income can help you maximize your savings. There are various opportunities out there to boost your income. You just need to explore them.


Learn How you can do your Financial Planning Efficiently



5) Get your budget on track

Getting your budget on track helps you hold back yourself from overspending. Having a far-sighted vision and long-term approach is what you need to have in your twenties to have control over your spending urges.

Debt management plays an important role in your financial planning. When you have debts to pay off, concentrate first on high-interest debts. Let debt payment be part of your budget.


Step 4: Learn about financial planning

Financial planning differs from one person to another, depending on their annual income, expenses, risk-taking ability, return expectation, financial goals and financial obligations, etc. the first job is always special.

The thrill of newly attained financial freedom, weekends with friends, dining, partying and managing everything in a new city gives you no time for financial planning in your twenties.

Many may even feel setting aside money and saving for the future is tough. Some may think it is too early to save. But the fact is that the twenties are the best time to save.

And, financial planning must start as soon as you start earning. You miss out on the ‘time and compounding’ advantage that you get for early life savings. Also, keep yourself updated with Financial News by downloading the Koppr App.

For example, let’s assume you are 23 and you think you cannot save money with only INR 1,000 left after all the expenses.

Now, let’s see how much that INR 1,000 if invested monthly can benefit you over the long term. Let’s assume you are investing INR 1,000 monthly into an equity mutual fund via a systematic investment plan route.

If you continue this investing till you reach 50 years of age, you would invest a total of INR 3,24,000.

If the fund gives you an average return of 12% CAGR, your investment would value around INR 24,37,000. Isn’t that a good corpus? such is the magic of time!

That means to create wealth over the long run, all you need to do is invest regularly (irrespective of how small or big the amount is) and smartly in the right type of investment option.

To do so, you need to have basic personal finance and financial planning knowledge for long-term investment success.

Having a basic idea of investment options, the importance of financial planning and how different investment products work help you in making a smart and an informed investment choice.

It is also important to continually upgrade your financial knowledge. That does not mean you need to obtain a degree in financial planning.

You can just take a quick online course of Koppr on early financial planning to boost your financial literacy. Instead of spending on lifestyle upgrade, spend on continual mind upgrade by learning new things.


Bottom Line

There are no foolproof methods or steps for becoming wealthy.

However, realizing the importance of savings, proper financial planning and having a solid plan of action for your financial future can ensure the best start in your twenties to become wealthy in future.

Got a finance related questions? Download the Koppr App and get expert answers to your questions