₹e-Assemble Step 2: Lay the Foundations to Get Rich

Published: November 11, 2017 at 9:56 am

₹e-assemble is a video series covering the basics of money management and goal-based investing for absolute beginners. Last week, in step 1 we consider the need to list our Goals, Dreams and Nightmares. In part 2, we will consider the essential foundations for getting rich and staying rich.

When we talk about getting rich or building wealth, we often focus on investments – where, when, how much, how effective etc. While that is important, an unexpected expense can result in redemptions. So before we talk about investing, we need to anticipate the unforeseeable! Account for possible unexpected/unsavoury expenses.

The next four steps are:

  • Building an emergency insurance (discussed in this video)
  • Getting life insurance
  • Health insurance
  • Accidence insurance

Once these essentials are in place,  we would feel that much more secure and in peace. Debts can be handled better and investing started when possible.

In the video, I list common ways in which emergencies can arise. It is not possible to have a fund large enough to accommodate all of them at the same time. However, it is important to be able to handle at least two of them simultaneously. This means accumulating an emergency fund for life!

When I talk about this, someone in the audience always goes, “but life is uncertain, no? No matter how much we plan, there will always be something that we did not anticipate, so why worry too much?”

Well, only when we can prepare for sudden expenses that can be anticipated, can we be ready (mentally and financially) if our entire wealth becomes an emergency fund!

Please do not get scared of what I am trying to say below. Start small and build your emergency fund gradually. Remember that this would be one of the best investment that you would ever be making!

There were some focussing and sync issues in the youtube video of the first part. Hopefully, things have improved now. The drawings that you see on the left side are my son’s. My entire house is filled with his doodling.

Would you like me to speak on the basics of money management to your co-workers? Then you could write to me at freefincal [at] gmail.com. I do not charge a fee for this and only request that my travel expenses be compensated.

Click this to follow other steps of ₹e-assemble

You Can Be Rich Too with Goal-Based Investing, my first book is now available at a 35% discount for Rs. 258. It comes with nine online calculators. Get it now.

Gamechanger, my second book is now only Rs 149 (25% off).  Get it or gift it to a young earner 

The ultimate guide to travel by Pranav Surya is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step.  Get the pdf for ₹199 (instant download)

 


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About the Author Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice. He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com
About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. Follow us on Google News Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any kind of paid articles, promotions or PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
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Travel-Training-Kit-Cover-new This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)
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