It’s old wisdom to save money for rainy days. Saving money is not enough because there is inflation which will reduce the value of the same money in future. There is opportunity cost which means the money could be used to create assets.

Investment is not only about the stock market. You can invest in anything. Be it business, real estate, metals, wine, humans etc.

Our upbringing plays a major role in life. Someone born in the 90s will be different from someone born in the 70s. Someone born to government servant parents will be different from someone born into a business family.

Everyone has a different belief system, behaviour toward money, risk-taking capacity, etc. There is no rule which fits all. For example, I am optimistic about the share market, technology etc. You might be confident about gold, fixed deposits etc.

When you believe in something, investing in them during hard times is easy.

If you have any loans, clear them first before going for investments. Even though, I do not follow this. If you can make returns more than the interest rate of the loan, you can go for the investment. Because investment is also about learning. Resources are limited. Always. You need loans to progress. Take loans for purposes like education, business, etc.

A credit card is good. Minimize its use just to stay in control.

An emergency can arise at any time. You can meet an accident or you can lose your job.  So you need an emergency fund to take care of yourself and your loved ones. The size of the emergency fund size depends on how many people depend on you. As a general rule, a three-month expense is enough. The credit limit of the credit card can be used in case of a medical emergency. Give one card to your parents with the freedom to use it for anyone in case of a medical emergency.

Always have enough liquidity (Cash). So that, you don’t have to sell the assets when you need money and you can use them to buy more when the market is low.

Have realistic expectations. You can’t be a millionaire by investing in hundreds. You can only make a certain percentage of your investment.

Before earning returns, you have to prevent loss of money. One worthy goal of investment is to beat inflation.

Three years back I purchased some stocks at a fair value. I was in profits. Yet, I sold them just to have peace of mind and focus on other important things. So, If something costs you your peace of mind, it is not worth having.

Decide what type of investor you are. Active or passive? Most of us have other things like jobs, business etc. to take care of. We can invest actively. When you don’t have time to actively pursue investments, I advise you to choose any index fund and start a monthly SIP. Consider investment as a monthly expense.

For tax savings, if you are planning to invest in an ELSS fund, do it as a one-time yearly investment when the market is low because these have a lock-in period of 3 years.

(…..To be updated)