Learn how to make your money work for you with 6 super useful tips from Cube's Founder & CEO, Satyen Kothari.
Picture this… you’re basking in the sun on some yacht off the coast of Milan. You pour yourself yet another glass of Dom Perignon because you want to and can afford to. Your money has earned enough in the last few years for you to have all the Dom you want to.
I’m not a stock market expert but I do work with some of the world’s best ones. Which is why I can confidently say that it is possible to make a lot of money using what you’ve already saved up. If you want to make your money work for you, here are some things I strongly recommend.
Making your money work for you entails being aware of your income and spending and then making a budget in line with those figures so that you may utilise that money to improve your financial stability over time by making investments and saving money. However, neither of those things is possible without first being aware of where your money is going and discovering more effective methods to use it.
Get rid of your debt… not the kind that will help you buy a home and save taxes but the kind that lets you flash that new iPhone and drive that shiny Mercedes Benz just to keep up with your coworkers, friends, and neighbours.
Being debt-free is the first step to financial freedom. “After all if your money is always working to catch up with interest, it’s not working in your best interest, is it?”
Essentially bad debt is money working against you – it’s you paying more than the true value of a depreciating asset, so do yourself a favour – pay off your debt first.
Create an emergency fund for yourself that you can reach for when all else fails. By all else, I’m referring to the other things you must do! You must buy yourself a simple term life insurance and personal health insurance that covers all costs.
These investments not only protect you from emergency expenses but also help save tax. However, the most important reasons to buy these is the peace of mind you will get. The last thing you want to worry about in a bad life situation is money – these simple tools go a long way in protecting you from future anxiety and stress.
Don’t make investments an end of the month or pre-tax month activity. Invest first before the month’s spending starts (aka pay yourself first) and make sure you’ve set up some sort of automated Sip that also lets you cancel it on an occasional month without stress.
I call this a SuperSIP. This ensures you invest first and then spend what is left, instead of going the other way around.
You can do this yourself through a variety of financial products, I would, of course, recommend the Cube Wealth App because it really takes the pain out of finding the right investments and maintaining a monthly savings habit.
When it comes to money, knowledge is power and you’d be surprised to know how many don’t know what their mutual fund investments are doing on an annualised basis, or how much the gold they bought 10 years ago has changed in value in annualised terms.
You don’t succeed if you don’t track it. You need to keep an eye on your finances. Track your income and expenditure every month. Invest regularly. Track your portfolio regularly to ensure it is doing well for you.
A lot of us start out alone without any help. Not having a wealth coach on your team means even the wisest of us can falter. You don’t want to invest in 10 stocks, 30 mutual funds etc.
You want to invest in a personalised portfolio that is right for your life and your risk level. Find a wealth coach (Not the sales guy your bank sends masquerading as one). If you pick the right investments with the help of the right coach you’ve won half the battle.
You can use our mutual funds analysis tool for free to understand whether your current financial portfolio has quality investments.
Most of us wouldn’t trust the cheapest doctor for a cardiac operation. So, why trust an investment app based on the lowest fees? Do your due diligence and ensure that you are optimising for the best wealth creation, and not just the lowest fees. Don’t miss the forest for the trees.
That’s my two cents on how you can truly grow your wealth. And remember… you’re not looking for someone to come take over your wealth you’re looking for a wealth coach who can guide you and take the pain if small manual tasks away from you.
The best way to make money is compounding. In investments, compounding means that interest is calculated on the principal amount and the interest already earned. Simply put, you’ll earn interest on interest.
This leads us to one of the most popular phrases in mutual fund and stock investments, ‘the magic of compounding’ - it’s simple math. But the utility of compound interest is best represented through the value of our investments over time.
Money is a system of value that facilitates the exchange of goods and services in an economy. It can be used as a medium of exchange, a store of value and a unit of account. Money can be any physical item or electronic record that people agree to use as a form of payment. Money flows depict the way that money and credit circulate in the economy as income turns into savings and investment and back again.
Saving money can be beneficial in many ways. It can be help you with post-retirement expenses, to fulfill your short-term goals like buying a car or house or planning for higher education. It can be a life saver in unforeseen circumstances of life.
You may use apps like Cube Wealth or speak to a Wealth Coach to make an Investment plan that aligns with your budget, goals & risk tolerance.
Making your money work for you is part science and part art. The science involves identifying your risk profile and investment goals. The art involves investing in solid assets with top-notch financial advice.
Cube helps you make your money work for you by giving you access to reliable investment options from the world of mutual funds, stocks, alternative assets, and more.
Download Cube Wealth to get started
Watch this episode of The Cube Wealth Show where we talk about best ways to invest your money! For someone looking to make their money work for them, it is also essential to ensure they invest money in the best assets.
on stock picking, poring over excel sheets, financial news, analyzing market trends, tracking the Sensex, researching company fundamentals, comparing mutual funds, reading financial reports, trying to predict the future & losing your sanity!
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