”Money Making Hacks by Jasmeet S Anand” Vol 6

Finance looks like a heavy term to carry for an eighteen year old. Strength of the base decides strength of the building. There is a lot of heavy iron beneath foundation of every tall building.

Early, we know about finance, lesser are the chances of making mistake with the same later.

In this article, I am not getting into jargons of finances, We will discuss some very simple and basic stuff for a strong foundation.

1. Make Money

Every Teenager should learn how to make money ? By working at a nearby restaurant or by coding for the school. By teaching tuition to younger students or playing guitar.

Nothing makes you small. These are your formation years. Faster you learn to work with others, makes you a better team player. Also, Earning your own money gives you pleasure.

Amongst all material pleasures, Making money can safely be put on top among preferences.

2. Save Money

Am sure, You are not getting this advice for the first time. Your very first toy you would remember, was a piggy bank. Parents way of making sure that you save money.

A simple calculation is Earning - expenditure = (+Savings) !

The expenditure should be lesser then your earnings at all times to save. Many youngsters think that there is long life to save, Now is not the right time. There is no right or wrong time for savings. Who knows what tomorrow holds ? But, basis that theory, we can not stop planning for future.

Save Save Save - Small or big. Just Save !

3. Spend Wisely

Every time you buy something you did not need, You know it was not wise to spend.

Consumerism is at its peak, New phone models, designer clothes, Jewellery etc are available on click of a button on your lap tops or phone set. There are attractive schemes also making your decision to buy easier.

Be a part of the economic growth by contributing to the consumerism, But, Be wise.

Contribute to economy up to your limit only. Set a limit for your self for spending on each item and stay within the limit.

You will have to pay for the spend from your resources - Either your earnings or your savings or your inherited wealth. They all belong to you till the time you don’t part with them for an expense.

4. Invest for future

With lesser responsibilities today, You have ability to save for future. With all the capability, You surely will earn more tomorrow, With the investments today, You will have another you (your investments) working for your earnings.

Imagine Rs 1000 per month investment with average 15% return in 10 years can become 2.8 lacs. Now, Is Rs1000 per month a big deal ?

Future is uncertain either ways, There are lot of surprises and some shocks too. Let’s hope for all surprises and prepare for some socks too.

Investment is not only for hazy days, It’s also for your plans in future.

Grandparents invested in a land in village or bought some shares of MRF or built a house where the family lives is also an investment, they made. Aren’t many reaping the benefits today? Your future will thank (or won’t) you for your wise investments today.

5. Plan Financial Events

We all have plans for life, To marry, To travel, To buy a House, To buy that dream car, To buy that Motorcycle, To …!

All the plans have one thing in common, They need money ! Plan the events financially too.

If you planning to buy a house in 2029. The cost of the house today is 50 million INR, You intend to take 80% loan on same. Leaves you with worry of 20% margin money and hike in price of the house by 2029.

Start investing in your dream house after calculating the price hike, amount you will need as margin money. Do a reverse math and start inviting monthly from today till 2029.

Same for your marriage and dream car or kids education.

If we have clear plan for financial events, Nothing will come as a burden at the given date.

6. Do Budgeting

Budgeting is important for every one at every stage. Early we start, Farther we go!

Each one of us will have different appetite for different expense heads, Some of us will spend more on travel, some of us will spend more on housing, some of us have a plan for higher education ( Though money spent on education is investment and not an expense)

Your earnings have to be planned well so that you have well distributed budget to your lifestyle, education, travel, housing, clothings and exigencies.

Most of the youngsters go wrong on budgeting, as confidence on their future earnings or mis calculation of inherited wealth, are two major factors disturbing the budgets.

Other reason for over spending is peer pressure. Remember, Every one has own circumstances and background to their spendings. Do not live under wrong influences.

7. Intelligent Borrowing

Avoid Borrowings at early stage. But, If you have to, then Do intelligent one!

If the borrowing is from a friend without interest, Ensure you pay back in time and if possible do it through EMI. It reduces burden

Borrowing with interest? Please be sure that you are getting best deal available. A lot of lenders find the young segment very lucrative for lending. Since, youngsters do not do a lot of research and just go ahead with any rate of interest for short term lending.

You borrow 8500 and pay Rs100 every day to repay. How does it sound? Easy.

You are paying 64.4% by agreeing to this loan. Where as average cost of borrowing is not more than 10-11% in India, You end up paying this high.

Prefer to borrow only when you have a plan to make more money from the borrowing than the cost of the borrowing. Do not borrow for luxury or perishable.

Be careful, You are target for many lenders for small lending and big returns. DO NOT GET EXPLOITED.

8. Limit Credit Card

Credit card usage is almost unavoidable today, Let's not run away from Credit card.

It is best form of credit for prudent users. You do not need to borrow money from anyone if you know how to use Credit card to your benefit.

Make a note of credit card billing cycle, Note the due date, Make payment always in time!

All you need to do is, Talk to your bank and limit the Credit Card upper limit. So that you don’t over spend.

Credit card comes with a bouquet of free services, Lounge access at airport, Free movie tickets, Cash back and so on.

Use the Credit card with in limits. May be the limit should be less than 60% of your monthly earning. Go back to point no.6 - DO BUDGETING.

9. Diversify your Portfolio

Youngsters have opportunity to start a fresh and today there are so many options available to invest.

Back then, couple of decades, Only option was to invest in Bank Fixed Deposits or real estate. Real estate was always expensive and lesser people had access to bank loan, So many just kept their money in Bank deposits and let their money deplete.

Today there are multiple options to invest, Real Estate, Gold, Mutual Funds, Equity, Bonds, Foreign markets. Also there are options to buy in fractions or buy digital all the above assets.

No one knows which way the asset will move, So prudent investors hedge their investments by diversifying. Its de-risking all your money with one asset class. And, If all the asset classes do well, And, It's very much a possibility for long term investor, You stand to gain every where.

A property you bought might earn you rental in long term, Mutual Fund you invested may pay you handsome dividends, Equity you researched and became part of might become a regular income source for you, A traditional investment, Gold, might boom in years to come and your investment can help you fulfil your dreams.

10. Live your Life

Most important is to “LIVE LIFE”. Do not forget to live it, Do not crush the life under the desires of being RICH.

Money also has a component called “LUCK”

Do the right things in life. Have dreams, Chase them. Make Goals, Work to achieve them. Learn New things. Learn language, Learn more about other societies, cultures.

Do charity, Be compassionate, Be considerate, Be Generous!

Make friends, Be True friend, Love others, Do Good, Do not expect much.

Give happiness, You will get happiness in return!

Educate your self, DO NOT STOP LEARNING.

Money can buy a lot. But, Happiness can not be SOLD or BOUGHT. It can be only be gained in bargain called LIFE. “LIVE LIFE”

jsanand75@yahoo.com