It will be an opportunity for an investor to take a trade if they know the future price of a share before they purchase it. Fundamental analysis helps to predict the future price of any share.

Investors can book profits, if they can purchase the undervalued shares on the basis of fundamental analysis and then wait for the market to reach the correct value price, to sell it.

• Fundamental analysis is the process of analyzing the current performance of a company on the basis of financial statements and industry trends.
• Fundamental analysis is a method of evaluating the fundamental performance of the company to predict the future share price.

Fundamental analysis includes the analysis of business financial statements, operational health, product competency, and market opportunity.

Below are the fundamental analysis tools or factors need to consider for an investment decision and the favorable conditions for an investor.

Market Capitalization          : Higher is the capitalization, safer for investment.

Face-Book-Market Value         : Higher Market value compared to book value, the stock may be overvalued or stock has higher potential.

EPS (TTM) -Earnings per Share  : Higher the value, good for the investor.

Price to Earning Ration (P/E)  : Lower the value, good for investors.

Industry P/E   : Lower P/E compared to industry P/E, good for investors.

Dividend Yield : Higher dividend yield is good for investors.

Deliverable    : Higher deliverable is good for investors.

Promoters      : Higher promoter's credibility is good for investors.

Through the fundamental analysis, an investor can understand the true value of the share and take the once of the following action. This true value on the base of analysis is called the intrinsic value.

If the intrinsic value <   Market price  = Buy the share.

If the intrinsic value =   Market price  = Need to hold the share.

If the intrinsic value >   Market price  = Need to sell the shares.

Below listed fundamental analysis details help an investor to identify the suitable stock to invest in. Fundamental analysis is an important factor, which helps to avoid the investment financial misatake.

Market Capitalization.

The total market value of a company’s outstanding shares is called Market capitalization. It is calculated as below.

Market capitalization ( market cap) = (Total number of a company’s outstanding shares) X (current market price of one share).

Market capitalization in the simple terms we can say as the total market value of all outstanding shares. Companies are typically divided into 3 categories on the basis of market capitalization:

• Large-cap  (Capitalization morethan Rs.20,000 crores) 
• Mid-cap     (5000 crores and less than Rs.20000 crores.)
• Small-cap  (Less than5000 crores)

Small-cap 

Small-cap are the companies having relatively small market capitalization.

• In India, companies with a market capitalization of less than5000 crores are classified as small-cap companies.

Mid-cap 

Mid-cap are the companies having medium-level market capitalization.

• In India, companies with a market capitalization above Rs.5000 crores and less than Rs.20000 crores are considered mid-cap companies.

Large-cap 

Large-cap companies are the companies having large market capitalization.

• In India, company’s with a market capitalization greater than Rs.20,000 crores is classified as Large-cap companies.

Higher the market capitalization more secure for an investor to invest. As the company's business is already large, the probability of the share price goes up will be more.

Face-Book-Market Value of the company

Face Value, Market Value, and book value are the three valuations of the shares of the companies. On the basis of these values, an investor can decide the valuation of the companies share price. First, this blog will explain, what each value is and then will share, the significance of each value on the buy or sell decision.

Face Value

Face value is the nominal or the original value of a security, stated by its issuer at the time of issue. For stocks, the face value is the listed value of a share in the certificate.

• A companies stock’s face value is the initial value of the unit share, which is indicated on the certificate at the time of the initial issue.
• The face value of a share remains the same until the company declares the stock split.

Market value

The market value, of a share, is determined based on principles of demand and supply of the company’s share in the market. It is defined as the price at which an investor is willing to buy or sell a particular share, in a stock exchange at a specific market time.

• The actual market value of a stock is always influenced by the forces of supply and demand.
• If demand increases, market value will go up, and if supply increases, market value will go down.

Book Value

The book value means the value of a share of a company which reflected on its financial statements. Book value is the price that investors would get per share if the company decides to liquidate the company and sold all the assets and paid all its liabilities and obligations.

• Book value is the net value of a company in its balance sheet.
• Book value is roughly equal to the amount per share all shareholders will get if the company gets liqudated.
• Book value is the net asset value investors get by holding a share as it is the actual current value of a share.

In general, market value tends to be higher than book value, since the market value is influenced by the profitability and future growth prospects of a company.

If the market value is much higher, it means that the company has higher potential growth, so investors can invest in that company. If the market value is lower than the book value, it can be a positive or a negative situation for the buying decisions. Hence  Price-to-book ratio is a critical factor for an investment decision.

Price-to-book (P/B)

P/B ratio is a popular way to compare the market and book value of a company.

Price-to-book (P/B) = Market value / Book value

• A lower ratio indicates it can be an ideal time for an investor to buy more shares as the current market price is near to book value.

If an investor purchases a share at a low market value, and later the company decided to liquidate, the investor will get more money as per the book value of that company.

If the market value is lower than the book valve, it is ideal to buy, but there may be a reason for lower market value, hence need to explore the following fundamental analysis, before making and buying decision. 

EPS (TTM):-Earnings Per Share

EPS   means  Earnings per Share 

TTM  means  Trailing Twelve Months.

EPS (TTM) means the total profits a company has made over the last 12 months divided by the outstanding total shares, I.e. earnings made per share. TTM can be any last consecutive 12 months, it is not necessary the company’s last financial year. Below is the earnings per share calculation formula.

EPS = Total profit in last 12 months / Total no of shares.

 Earnings per Share= (Net Income − Preferred Dividends ) / End-of-Period Common  Outstanding Shares of the company.

 Consider the below example:

The company's net profit in last 12 months is: 1000 crores

The number of shares outstanding is: 100 Crores 

EPS = 1000 crores/ 100 Crores = 10

 EPS indicates the company’s profitability. The higher EPS value of the company represents the company is under the more profitable condition.

• EPS shows, how much money an organization makes for each share.
• EPS is widely used to estimate the companies corporate value. Higher the EPS, the more the value.

For an investor, if the companies EPS is higher, it is ideal for an investor to make a buying decision, as the profitability of the company is more.

P/E:-Price-to-Earnings Ratio

The price-to-earnings ratio (P/E ratio) is the ratio that indicates the value of a company, it is measured by dividing the current share price by its earnings-per-share (EPS). P/E ratios are used by investors to determine the relative value of a company’s shares.

P/E Ratio= Current market price of share / EPS of the company.​

• P/E ratio shows whether a company’s stock price is undervalued or overvalued.
• The Price-to-earnings ratio indicates how much cash an investor needs to invest in a company in order to earn one rupee profit from that company’s earnings.

I.e. P/E of 5 indicates that investors need to pay 5 INR to earn one INR in a year.

Lower the value of the P/E is good for the investor to make a buying decision, as it gives more return on investment.

A high P/E ratio means either of below

• Either the company’s stock is over-valued or the Investors are expecting high growth rates in the near

A low P/E might indicate either of below

• Either the current companies stock price is undervalued or the Investors are expecting low-growth rates in the near

P/E ratio indicates the price which investors are willing to pay for a stock of companies, based on its future and past earnings.

Two kinds of P/E ratios are derived

• Forward P/E:- Calculate based on the forecast earnings.
• Trailing P/E:- Calculated based on the past performance.

Industry P/E

PE ratios could depend upon the industry performance.

The industry P/E is calculated by taking the median of P/E of all the companies in the industry or sector.

• Industry P/E performance is decided on the basis of the historical P/E average of all the companies in the industry.

If the P/E of a company is a lower value compared to the industry P/E, that means, the performance of that particular company is better than the average industry performance. I.e. it is ideal to invest in that company.

Dividend Yield

The dividend yield is the ratio of total dividends paid to shareholders to the market value per share. The dividend is a corporate action and the dividend yield is expressed in a percentage.

Dividend yield = (Annual dividend per share / Current share price ) X 100.

The dividend yield is also calculated by dividing the company’s total annual dividend payout by the total market capitalization.

As the higher value of dividend yield indicates, investors will get more money as dividends, for the shares they are holding. It is advisable to buy and hold more shares

Deliverable

Deliverable is the percentage of the number of shares taking delivery into Demat or selling from Demat account, out of the total quantity traded in a day in the trading account.

Below is the example shows the deliverable quantity to traded quantity.

The total traded quantity of a Stock of a company in a day is 100 lakh. In that 80 lakh quantity is for Intraday trading and remaining quantity of 20 lakh are the delivery order, these 20 lakhs of share is called the deliverable quantity. It is represented in percentage, hence the deliverable is 20%.

Deliverable = ((Total trade quantity - Total Intraday quantity) / Total trade quantity ) X 100.

• If the Deliverable percentage increases, it means, more investors are taking the delivery for holding it, which in turn means, the stock is bullish.
• If more buyers are coming, automatically demand will increase, and prices will increase. If Deliverables reducing, the price will reduce.

If the deliverable is increasing, it is advisable to buy and hold more shares as the chance of the market price getting increase is more.

Promoters.

A corporate promoter is a firm or person who worked for the formation of a company.  A promoter is a person who played a major role in making the business plan, raising capital from various sources to start the business and incorporate a company. promoters’ duties and liabilities are endless and their efficiency and capability decide the companies future performance.

A promoter can be referred to as the founder of a business.

• If the credibility of the promoter is more, investors can invest in the company with more confidence as the chance of getting a return will be more.

As per SEBI rules, promoters’ shareholding in listed companies should be a maximum of 75% of the total no of shares. If the holding is more than 75 percent, the promoter needs to bring down the holding below 75% within three years from the date of listing.

Investors can invest in a company with confidence if the credibility of the promoter is more.

CONCLUSION:

Fundamental analysts are concerned with a stock’s valuation and the price at which it is trading. Technical analysis is concerned with the performance of the stock price movement on the basis of stock’s supply and demand. If an investor chooses a stock that is fundamentally strong, which will in-turn gives a guaranteed return in the long run. It is ideal to select a fundamentally strong stock for meeting the financial goals in the long run.

This article covers the basic fundamental analysis techniques and the following article will cover the Fundamental analysis vs Technical analysis. There are many share market learning books available in the market which covers the Technical analysis and charts, fundamental analysis methods, and tools in detail.

Thanks & Regards.

MyMoneyBooks.

Financial expenditure for children’s education and basic needs like marriage is a vital part of any family expenditure.

One of the biggest responsibilities of a parent is to provide adequate financial assistance to children until they reach a self earning stage.

For Parents, to guarantee the return and safeguard the hard earn money, it is advisable to diversify the investments among the below-mentioned investment options for the children. After understanding about different plans to choosing the right investment option, considering the fact of high financial expenditure for the kid’s future, paying small fees for guidance from a qualified financial adviser, who can guide to select a suitable investment option, will be worth it.

In this article, we are covering the 10 investment options for children’s future in India, which can be started at a younger age and provide adequate returns during the time of requirement. Most of the children’s investment plans can start very easily and provides tax benefits to the parents.

The top 10 investment options are listed below.

1. Direct Equity Investment.
2. Mutual Funds.
3. Gold Saving.
4. Bonds and Debt investments.
5. Fixed Deposit in Banks.
6. Life insurance plan for children.
7. Public Provident Fund(PPF).
8. Sukanya Samriddhi Account (SSA).
9. Privet child investment plans.
10. SIP – Systematic Investment Plan.

The best gift a parent can offer for a kid’s birthday is a promising a secure financial future by investing in suitable investment instruments during their younger age birthday. Foreseeing the inflection rate and expected financial needs of the kids in the future and identifying the suitable investment plans is the talent of a smart parent.

Only the Basic details of the different plan are covered in this article, if you would like to know the further details of each plan, click on the respective links below.

Equity Investment

Parents can open a Demat account for their children and start acquiring stocks and invest it for the children as in the long run equity market outperform any other investments. Equity investment in blue-chip companies is the best investment plan for higher returns for the children. In addition, if a parent doesn’t want to open a separate Demat account for the kids, they can start purchase the quality stocks and hold them in their account, and later they can transfer it to the children’s account as a gift to them.

• These stocks children can use for their financial needs in the future.
• It is advisable to have adequate knowledge in equity and share markets before considering it as a prime choice for a child’s future.

Mutual Funds

Mutual funds are one of the best investment options for a parent, who doesn’t have much knowledge in the equity market, for their kid’s investment as it provides a guaranteed return in long run. Early starting of a mutual fund helps parents to achieve future long-term goals like marriage, child’s education, etc.

• A parent can start investing monthly as small amount as Rs. 500 per month in SIP mode or as a lump-sum amount in the kid’s name.
• It is ideal to have hybrid mutual funds if it is for the children.

Gold Saving

Gold is a guaranteed return investment option for children’s future. A parent can invest in Gold either by purchasing the physical gold like coins or ornaments or electronic gold like Gold ETFs (Exchange Traded Funds) or SGB (Sovereign Gold Bond). It can be liquidated easily at any time, in the need of money.

• Considering the factor of safekeeping, it is ideal to purchase the electronic gold, if it is for the long term.
• A parent can purchase the electronics gold online through a trading account of a trade broker and store it in the Demat account.

Bonds and Debt investments

As Bonds and Debt provide the yearly guaranteed return, which will be higher than a bank FD, it is the best option for a parent to invest for the future of the children. A parent can buy the bonds through the trading account just like other equities and stores in the Demat account for the kid’s future. Parents can also use some of these investments for Tax exemption purposes.

• There are also tax-free government bonds available, which will provide the benefit of tax exemption for the parents.
• Investments in short-term debt funds are the ideal options to meets the child’s recurring expenses like school fees.
• Short-term funds are flexible as they can easily liquidate as and whenever required.

Fixed Deposit in Banks

In India, Bank Fixed Deposit is the most popular investment option for most parents for children as it offers a risk-free guaranteed fixed percentage of returns. Fixed deposits can start for any period of time and they can be broken at any time to meet the financial needs of the children. It is better to have multiple small amounts of FD than a single large amount of FD as it helps to break one or two of these small FD’s, instead of a single large one if any financial emergency comes in between and other small FD’s can continue smoothly.

• Parents can also start the Recurring deposit in the name of the children so that it will offer the corpus over the long run.
• There are also much tax exempted fixed deposits for 5-years, which will offer a guaranteed return to the children and tax exemption to the parents if the children are minor.
• On maturity of the FD (principal + interest), parents can easily renew it online or offline for long-term growth.

Life insurance plan for children

It is ideal for a parent to start a life insurance plan for the children as it provides insurance coverage for them along with the investment. Most of the children insurance plan provides a corpus for the child during the maturity, it can be used for their higher education and other financial needs. There are also have few dedicated investment plans available for child education in India. One-time investment plans for children in LIC is easy to start and invest in.

• An important factor that needs to consider during the selection of a plan is that an insurance policy needs to cover the financial needs of a child even in the absence of parents.
• Parents can start the insurance policy online in the LIC web-portal or through the portal of other private insurers or directly from their offices.
• Most of the insurance plan help to save tax to the parents under 80C of Income Tax act, if the kids are minor.

Public Provident Fund (PPF)

An easy and secure investment option for the long-term goals of the children is to start Public Provident Fund during the early age of the children. A parent can start the account at any age of the children and earns a fixed rate of interest (Yearly it very) which will be much higher than a Fixed Deposit can offer. The account can start through any nationalized bank or through the post office. PPF is one of the best child investment plans in the post office.

• The minimum lock-in period is 15 years and it can extend in blocks of 5 years.
• To maintain the account parent need to invest a minimum of Rs. 500 in an FY.
• Parents can also claim tax exemption under 80C if the child is a minor, maximum up to 1.5 lakh.

Sukanya Samriddhi Account (SSA) 

Sukanya Samriddhi Account (SSA) is one of the best choices for a parent who had a girl child under 10 years. It is the best child investment plans of the government for the girl child. It offers a guaranteed fixed return higher than a PPF account. A parent can start the SSA account in the name of the girl child through the authorized bank or through the post office. A girl child will be the primary account holder and a parent/legal guardian will be the joint account holder.

• The minimum deposit amount in a financial year is only Rs. 250.
• A parent can claim tax exemption for the deposited amount into the SSA account maximum of up to 1.5 lakhs in a financial year.
• SSA account has a minimum tenure of 15 years and needs to become 21 years of age.
• The amount can be withdrawn only if it is matured or for the financial need of the girl child like higher education or marriage.

Privet child investment plans.

There are many private companies like Bajaj, Birla, and banks like ICICI, SBI offers many child investment plans for the child’s higher education and other future financial needs. These investment schemes can start just like a mutual fund from the investment agencies. There is much one-time investment plan for newborn babies in India which will guarantee the financial needs for the higher education and marriage needs of the kids. Most of the investment brokers provide the child investment plan calculator on their website which will help to calculate the returns very easily.

• Most of the plans can start at any age of the children and even for a small period of 30 days.
• Most of the plans allow partial withdrawal even before the maturity period.
• Most of the plans have the premium payments in monthly or quarterly and the payments can be done through the standing instruction from the banks.

Few most popular child investment schemes in India.

• TATA AIA Super Achiever Plan.
• Max life Shiksha plus super plan.
• PND Metlife smart child plan.
• SBI Life – Smart Scholar.
• Canara HSBC Child plan.

SIP – Systematic Investment Plan

The best and easy way for parents to build a corpus for the children’s financial need is to start Systematic Investment Plans (SIPs) in the name of children. Debt or Hybrid Mutual fund SIPs can be a good option for parents for the kid’s education and marriage needs as they offer decent returns even when markets are down. If parents need higher returns from the SIP it is ideal to select equity mutual funds with a diversified portfolio.

• The advantage of SIP Investment is that it can be started with a small sum of Rs 500 in a month.
• As SIP investment works on the basis of Rupee cost averaging, parents need not worry about the market movements.
• The prime factor that needs to consider for selecting the fund for the SIP is the overhead other charges of the funds.

CONCLUSION

Start investing and saving for the children as early in life is the only way to build an adequate corpus for the future of the children. While a parent planning for an investment for the children it is important to make the right investment choices. To make the right investment choice, parents can get help from the financial advisers available with the fund managing companies.

The Parents need to give at most priority to secure and provide adequate financial support to children for their education and other basic needs. Proper financial planning and investments help parents to handle the financial needs of the children without compromising their financial current needs.

Currently, there are several investment plans that can be started for the children and provide considerable returns for their future. Well, the thought-out financial decision will offer a hassle-free future for the parents.

Thanks & Regards

Harry.

The objectives of personal finance learning for newbie earners are to get them basic financial knowledge and necessary tools that help them to build the life which they envision. This personal financial learning for newbie earners blog will cover the basics about the following 4 topics which are essential for all new earners to understand before getting the first salary in hand.

1. 10 easy Investment options for newbie earners.
2. What is Personal financial literacy?
3. What are Personal financial responsibilities?
4. How to excellent Personal financial literacy?

10 easy investment options for newbie earners.

Saving and investing our hard-earned money in the right options is one of the important financial decisions of newbie earners. Personal financial learning helps newbie earners to take suitable decisions in selecting investment options among low-risk, medium-risk, and high-risk investments.

In general, bank FD, RD, ULIP, PPF  NPS… are considered low-risk savings and investment options. Equity and market-linked investments like MF and direct equity investments are considered high-risk investments. A combination of market-linked investments and fixed return investments are considered as medium-risk investments.

10 easy investment options for newbie earners.

1. Bank FD-Fixed Deposit & RD- Recurring Deposit.

• In RD-Recurring deposit, investment is made at a fixed period regularly for the predefined time period.
• FD- Fixed deposit is the investment in which investment is done for one-time for a specific period of time.
• For both, the percentage interest rate for the invested amount will remain the same.

2. ULIP – Unit-linked Insurance Plan.

• Unit Linked Insurance Plans (ULIPs) is moderate risk, a goal-based financial instrument that offers benefits of protection and Investment for the long term.
• Unit linked Insurance Plan is linked directly to the equity market.
• It offers flexibility to invest units in debt funds or in equity depending upon our risk appetite.
• ULIPs provide long term capital gains and also offer a protection cover.

3. PPF- Public provident fund.

• The public provident fund scheme is a safe and low-risk financial instrument.
• PPF is mandated by the government and provides a fixed return.
• The minimum time period is for 15 years and it can be continued.
• The investment minimum amount is 500 rupees and a maximum of 1.5 Lakh annually.
• PPF provides the option to avail loan against the amount in the account.

4. MF- Mutual Funds.

• A mutual fund is a market-linked financial instrument that pools money from a group of investors and put it into a portfolio of financial instruments.
• The portfolio includes stocks, bonds, and government securities…
• Buying and selling shares in a mutual fund are doing as units of portfolio.
• The risk of Mutual fund investment, Is based on the financial instrument on with the units are invested.

5. NPS- National Pension Scheme.

• NPS is a government-sponsored pension scheme.
• During retirement, NPS allows investors to withdraw a part of the corpus and use the remaining corpus to buy an annuity of security.
• NPS helps investors to get a regular income after retirement.

6. Investment in Direct Equity.

• Direct equity investment is a high-risk investment that will ensure long term growth.
• Growth of our investment fund based on the way the price of a share of the company performs.
• Investors are eligible for getting the dividend as and when companies offer it to the shareholders.

7. Bonds come under RBI Regulations.

• Bonds are fixed-income instruments, hence it is a low-risk instrument.
• Bonds issued by government bodies or companies to raise capital from investors.
• During maturity, investors will get back the investment amount with interest.
• Bonds are available as Fixed-Rate Bonds and Floating-Rate Bonds

8. Gold / Gold ETF

• Gold-ETF (Exchange Traded Fund), is a commodity-based Mutual Fund investment.
• In Gold- ETF amount is invested in assets like gold.
• Gold ETF  investors will get the unit’s equivalent in cash instead of actual gold.

9. Post Office Saving Scheme.

• Most of the post office fixed deposit investment is for a period of 10 years.
• It is a low-risk investment and provides a higher return than normal bank FD.
• The annual interest of the deposit is credited to the investor’s savings account.

10. IPO – Initial Public Offerings.

• Through IPO shares of a private company are offered to the public.
• Once the IPO is realized, investors can apply through the Demat account and get it.
• IPOs help companies to obtain capital through the primary market.

Well thought out decision based on personal financial literacy is needed to select the suitable investment options, which help newbie earners to meet the Personal financial responsibilities.

What Is Personal Financial Literacy?

Personal Financial literacy is the capability to understand the financial principles, which help to manage money effectively and wisely. The essential part of personal financial literacy is knowing how to manage money. To become personal financial literate, newbie earners need to take a step to implement personal financial principles in life.

• Financial Literacy is important for newbie earners because a proper understanding of personal finance concepts helps them to manage the earning effectively.
• Money is easy to mismanage, it will lead to a financial struggle in the future.
• If newbie earners spend time to learn how to manage money and apply those skills in life, they can build wealth easily.

What Are The Benefits of Personal Financial Literacy?

The benefits of personal financial literacy are countless however here are a few important points to the lookout.

• Net worth will grow continually, irrespective of what you earn.
• Helps to avoid going into debt, even with lower earnings.
• Less Financial Struggle in the older ages, even if don’t have any income.
• Better Household Finances, even in the situation of increasing expense.

What are personal financial responsibilities?

Financial responsibility means having a lifestyle that meets the social standards within means, regardless of the level of income. To succeed in personal finances, newbie earners needs to have a close look at the financial situations, evaluate earning, and make adjustments in the spending habits to match it. As Financial responsibility had a big impact on the future, it is important to expertise on personal financial literacy from an early stage of earnings.

Key points of Personal Financial Responsibilities. 

• The management of personal finances effectively to meet the financial needs of individuals and family.
• Meeting the standard of lifestyle irrespective of economic, cultural, social, and technologies.
• Able to support yourself and family financially for at least six months irrespective of zero income and adverse circumstance.
• Having an organized plan for saving and spending money.
• Making the right decisions early in life to become financially independent and having a comfortable retirement life.
• Understanding the four basic components of finance, like income, Expenses, Assets, and Dept.
• Having a good understanding of the difference between a Good and Bad Debt

To get expertise in the subject of personal finance, one need to understand personal financial planning concepts and applications. Application of Personal finance includes cash in and outflow, net worth and asset, income taxes, insurance, and consumer debt… A Financially Responsible person avoids Debt and should meet the financial emergencies from the savings or investments.

How to excel in personal financial literacy?

People will spend years getting a degree to get a well-paid career. To manage the earnings from the career newbie earners need proper financial literacy. It doesn’t take years to get financial literacy for beginners. With a focused effort, anyone can become financially literate over the course of a few weeks.

To develop personal finance literacy, newbie financial learners have many options like,

• Take a paid or free courses online or offline from some experts,
• By reading a couple of personal finance for beginners books.
• Learning from YouTube, Blogs, or Articles from any search engine.

5 practical steps to excel in personal financial literacy.

In-spite of learning to become experts in the domain of financial literacy needs to practice the following 5 steps.

1. Track Your Income and Net Worth.

• The difference between assets and debt tells where newbie earners stand financially.
• Keep an eye on income and expense help to keep the track of the progress of financial literacy.
• Manage Money by Creating a personal investment portfolio help to increase the net worth, irrespective of earning.
• Newbie Earners need to focus on regulating expenses wisely to become Personal financial responsible in society.

2. Set a Budget, time Period.

• As part of Personal Financial Learning, all newbie Earners should prepare a checklist of expenses.
• The checklist helps to knockout unwanted expenses and meet the personal budget with within the income.
• This budgeting is the starting point of for financial goals in life.
• Proper budgeting help to spend judiciously and deal with surplus cash.

3. Take a Daily Money Minute

• It is important to spend at least one minute every day to check financial transactions.
• Now there are many online apps available to manage and monitor our daily expenses.
• Preparation of money minutes helps to identify overall expenses and keep track of financial goal progress.
• This also helps to set the spending tone for the rest of the days in the month.
• In money minutes it is important to add a personal balance sheet and tax paid.

4. Allocate at Least 20% for the future.

• Planning for Retirement should be one of the prime objectives of Personal financial responsibilities.
• Newbie earners need to priorities, their savings, and investments.
• First priority of fund allocation should for building up emergency savings and retirement funds.
• Managing the debt wisely will help to safeguard the money for the future.

5. Spend at least 10% of Your Income on Lifestyle and fun.

• Spending the money for lifestyle and fun is an important part of Personal financial learning for Newbie Earners.
• If we don’t spend the money for the fun, during our retirement age, we may have a corpus of the amount in our hand, however, it may lead to regret about not enjoying life at a younger age.
• Income for Lifestyle and fun should include movies, outing, travel… ideally anything that doesn’t cover under the basic life

Conclusion:

For newbie earners, it is essential to spend time developing Personal financial literacy. through that, they can meet Personal financial responsibilities. Making proper budgeting and tracking the expenses is the fundamental of Personal financial literacy. The goal of every newbie earner should be to have a hassle-free retirement life with financial freedom, as early as possible. Practicing the knowledge earned through financial literacy is an important factor to enhance the skills.

Thanks & Regards.

Harry.