₹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!
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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.
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Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over nine years of experience publishing news analysis, research and financial product development. Connect with him via Twitter or Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
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You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.Your Ultimate Guide to Travel
This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and 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 300 (instant download)