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Breaking the Myths of Personal Finance

Updated: Feb 28, 2022

  1. Investments require a lot of money (Myth): There is no such thing as a "minimum amount" at which it makes sense to begin investing. Personal financial management should be viewed as a part of your overall life approach, ensuring that you routinely invest a portion of your income toward long-term goals and maintaining financial discipline.

  2. Plan your retirement after your 40's (Myth): The earlier you begin investing, the more you will invest regularly, and consistent returns can have a major impact on your savings by the time you reach each of your financial goals. We have heard that "money begets money" - or, to put it another way, savings help you save less.

  3. Risk shouldn’t be taken (Myth): Equity has the potential to provide better returns than a fixed-income asset. Before dismissing equities as an investment choice, one must make an investment decision based on one's life goals and risk appetite. You should consider taking calculated risks and adjusting your investment portfolio accordingly.

  4. Keep money in a savings account (Myth): When inflation is larger than returns, we are effectively surrendering real rewards for "safety." If the FD rate is around 5% at present and consumer inflation is around 6%, we are eroding our purchasing power. Thus, it's critical to invest money in a portfolio of multiple asset classes that match your goals and needs, rather than just a savings account.

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