We all earn money
And after earning money we also think what we should do with that money
And whenever you search about this, you will find a lot of people
What you should do with your money
But today I'm going to tell you a very interesting thing
What you shouldn't do with the money you have earned
I, Jagdeep Singh, welcome you to the Groww channel
Let us discuss today a very interesting point
Which will not only help you save money
But it can also make you a very good investor
I got this month's salary, I earned some money
Now what I will think is, first I will spend my house expenses
And make some more expenses after that
And the money that is left, I will invest that money somewhere
So this is the first mistake
The first thing we shouldn't do is, we shouldn't follow this process
So what should we do?
After you get the money, first you should think how much you should save from that
Invest that money and then use the rest of the money for your expenses
I agree there are a lot of housing expenses that we cannot avoid
Like house rent, fees for your children
Apart from that small expenses for your house
But if you first think about savings and small expenses
Then you will be able to avoid many kinds of expenses
Which, if you followed the previous process, you wouldn't be able to avoid them
So what you have to do from today is
Whenever you get some money, first you have to see how much you want to invest from that
Spend the rest later
If I tell you in simple terms
First save and invest, then spend
By this your savings will also increase and you will be a good investor
Assets, liabilities, we would have very commonly heard these words
But one mistake we do is that we first put our money in liabilities when we should be putting it in assets
So what should do first is put your money in assets instead of putting them in liabilities
Now you must be thinking what assets and liabilities are
Liabilities are those where you have invested your money
In the coming time, your money will become lesser, it won't increase
But assets, in the coming time, can give you good returns
If I tell you in simple terms
If you have invested in any mutual fund
Or in any stock
Then in the coming time, it can become a good stock for you
Liabilities, consider that you have bought a car
So the money you invested to buy that car
That was invested in liabilities
Because in the coming time, the value of the car will go down every year
And apart from that, when you bought the car, there are other expenses surrounding it
Which you don't think about while investing
So what you should do from now is try to invest most of your money in assets
Now must also be thinking that investing in a house is an asset
But if I talk about book which is very famous, Rich dad Poor Dad
In that book, it is mentioned that even investing in a house is a liability
So not every asset is an asset for every person
It depends on him, how he can save money in the coming time
So assets and liabilities are different for every person
As an intelligent investor you should be able to differentiate what an asset is for you
What is a liability?
And you should try that all your savings should go in assets and not liabilities
Earn interest but don't pay interest
Now you must be thinking what this small line means
If I tell you in simple terms
Then you should earn interest and not pay interest
Like we do a lot of expenses where we have to undertake a loan
Apart from that, we often use a credit card
And the end of the month we forget to pay the bill
Because of which we have to pay interest
So a good investor, who thinks clearly
If he can differentiate between these two things, in the coming time, he can be a very good investor
Because if you invest your money in the right place, then you will get good interest
And because of which your money in the coming time will increase
Now I will not tell you that taking debt or loan is a bad thing
But taking a loan and using it in your expenditure is a very wrong thing
And that destroys your wealth
But if you take some loan or debt and create good assets
Create a good business
Then in the coming time you can become a rich person
Inflation
These words are very easily ignored by common people like you and I and investors
We never pay attention to what this means
First I will explain to you what inflation means
Consider that this year the cost of bread was Rs 10
And next year the cost of this increases and becomes Rs 12
The Rs 2 increment in its price actually happened because of inflation
Which we also call
Now you must be think that I told you at the beginning of the video that today's topic is
What we shouldn't do with our money
So why have I started explaining inflation to you
Because along with inflation there is another thing
The mistake that common people like you and I make
And because of which the value of money reduces
And that mistake is we very often, remove a lot of our money
Keep it at home, thinking we will use it when we need to
But as inflation is increasing
And you money is kept at home in the form of cash
Then actually, its value is reducing
So you're actually becoming poorer if you're keeping the cash in your house
So you should always invest your money in such a place
Which at least beats inflation
If I give you the figure for inflation
Then normally in India, inflation is between 3-5%
So if your invested money doesn't give you a return between 3-5%
Then the value of your money is actually reducing
The mistake you shouldn't make is you should invest in such an asset class
Which at least give you more than 3-5% returns
The thing which we have a risk for, which can happen in the coming time
You should take insurance for it at the right time
Like in the coming time, we can fall sick any time
So for that a healthy individual should take health insurance at the right time
Apart from that you should take difference kinds of insurance and keep them before itself
So that whenever that risk comes up, you can mitigate that risk
But always pay attention to one thing
Never look at insurance as a form of investment because there is a lot of difference between insurance and investment
Like, you make an investment to create wealth
But you always take insurance to mitigate risk
There are a lot other benefits of insurance
Not only does it mitigate risk, but we also get some tax deductions on some kinds of insurance
Like on health insurance
So what do we get to learn about the discussions we have done in this video?
That we always have money
But we should always plan our budget with that money
And in that we should make all kind of planning from before
Like from that money, some is required for expenses
We should make investment from that money
From that money, we should also do some savings
And also from that money, we should buy some instruments
Which is the coming time can reduce our risk and mitigate our risk at the right time
So in the coming time you should pay attention to all these things to make the right investments and be agood investor
So at the end of this video I will give you a very important tip which can help you a lot in the coming time
Whenever you get some money, put some money in an emergency fund
Because in life some things can happen which we do not expect
And at that time if we need money, then we will have to remove it from good funds and from good investments
But if we keep an emergency fund
So if that is there in case of an emergency
We can use that fund and keep our investments intact
Our investments are also not disturbed and if we need money in case of an emergency
We can use that money from the emergency fund
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So I will end this video with a question for you
You also would've made some mistake with money in your life
For which you had to face the repercussions
So let us know that out of these mistakes
Or apart from this mistake have you made any other mistake
The use of which our existing investors can take
So that they don't repeat that mistake in the coming time
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Happy investing!