'Beta, get a job after graduation and stay loyal to that company until you retire.'

And the only financial advice you got

was, 'How to write a check'

With this Golden Knowledge, at the age of 21, I became a Software Engineer

at an I.T company that was literally paying me peanuts.

The money was bad, salary hike was almost zero,

work was pathetic

and my growth was stagnant.

Every month my salary would barely survive the end of the month.

But a girl needs money..

To study further, to travel,

to save for emergencies,

to buy a house, to save for retirement.

But most importantly, I needed money so that I can make my own life decisions

without having to depend on someone else.

We all talk about gender equality.

But it will come only when we first become financially independent.

And trust me, a 9 to 7 job is not going to get you that independence.

And yet, I am the only one in my family who

bought a house before turning 25.

And for that, you don't need to work for 10 hours everyday.

You need to make smart financial decisions.

And trust me, this is something that every girl should know.

Because, not only will it help your career

but it also changes the dynamics of the relationships you are in.

Be it mother, daughter or wife.

Because you will not be treated as a dependent anymore.

So girls, no matter if you are 20, 30 or 40.

By the end of this video, I will tell you

even if you have more responsibilities, low income, debt, taxes, how you can start investing now.

Because it's not about how much money you make.

It's about what you do with it.

But before that, if you like what I am saying,

then hit that big fat LIKE button

because that will motivate me to keep making more videos.

Let's begin.

So ladies, you can spend money on 2 things.

Assets and Liabilities.

Liabilities are something that take money away from you.

Like for example, if you have a car

you have to pay for it's gas, it's maintenance.

It's not making you any money. So, that's a liability.

On the other hand, assets make money for you.

For example, if you have a small apartment

and people are paying you rent every month - that's an asset.

If you write a blog, article or make a YouTube video that's generating you revenue even after

years of you creating it - that's an asset.

Mutual Funds, Stocks, even Solar Panels that you install, because

they will save you electricity in the future.

All of these are assets.

If you want to be financially independent

you need to have more assets than liabilities.

Sure you can spend money on some liabilities like an iPhone or an iPad

but before that you should first have more money coming in than going out.

So to ensure that you have more money coming in,

today we are going to discuss, different investment options available.

And by the end of this video, as a bonus, I'll also tell you

how to divide your money in these investment options

so that you get the best returns and eventually

your 'Apna Ghar'.

Saving Options can be divided into 2 categories.

Short-Term (0 to 5 Years) and Long Term (5+ Years).

We are going to analyse each saving option based on 3 parameters.

1) Liquidity. Suppose you have an emergency and need money right away.

Then how soon can you get that money from that investment, is called liquidity.

2. Risk, which is the possibility that you might not get all of your money back.

3. Returns, which is how much can your money grow.

Let's start with Short-Term Options.

Now, the first Short-Term option to save is obviously in the form of Cash.

Any notes that you see lying around and is yours,

save it.

Cash is available whenever you want to use them,

so that makes it's liquidity, HIGH.

The risk is LOW. It's not zero because somebody can still steal your cash.

And returns are also ZERO.

Why?

Because if you leave your cash in your purse for 5 years, it's not going to grow by itself.

So that makes returns, Zero.

Fixed Deposit, is when you give the bank, a certain amount for a Fixed Period.

But at a higher interest rate than a Savings Account.

For example, SBI gives somewhere around 4% for Savings Account

but for a Fixed Deposit, it ranges anywhere between 5.75% to 6.75%.

And it depends on how long are you giving your money for.

Are you giving it for 7 Days, 6 Months, 1 Year.

Now, coming to it's parameters.

Liquidity is HIGH.

Because even if you don't want to wait for those 7 days, 6 months or 1 Year

you can withdraw your money anytime you want.

Risk is ZERO.

Because your money is safe with the bank and the bank has to return your money back, along with interest.

And returns are LOW.

Because the interest rate is around 5% to 7%.

But remember, if you withdraw your money before your Lock-Down Period then the bank

will return your money at a slightly lesser interest rate.

Now there is something called as a 'Recurring Deposit'

which is just like a Fixed Deposit.

The only difference is, in Fixed Deposit, you put money just once.

But in Recurring Deposit, you put it every month.

For example, if you have decided on Rs. 500/-.

Then Rs. 500/- every month from your Savings Account will directly move to your Recurring Deposit amount,

which is actually a great option because it instills Financial Discipline in you.

You know that every month you have to save this much.

Now before we move on to Long-Term Saving Options,

let's talk about something that's even more important

and that's Health Insurance.

This is the first thing that you should invest in because frankly, life is unpredictable.

If tomorrow God-Forbid, you have an accident or you are recovering from an ailment

then you don't want to beg for money

and spend the rest of your life paying that debt.

Which is why a Medical Insurance becomes extremely important.

If your company doesn't provide it, then get one for yourself and your family.

You have to pay around Rs. 5000 to Rs. 7000 every year, which is like nothing.

And you will be insured a sum of 4-5 Lakhs to cover your Medical Bills, depending on the policy you take.

Moving on.

So far we have discussed the Short-Term investment options

where you work for money and then save it.

But if you save for long term,

your money will start working for you.

Here are your Long-Term Investment options.

What is Mutual Funds?

Mutual Funds collects money from people like us.

Rs. 500/- from me, Rs. 500/- from you

and creates a 'Money Pool'.

A fund manager then uses this 'Pool' to invest in Stocks, Bonds, Assets.

You don't have to worry about where it is being invested because the Fund Manager takes care of it for a commission of 1% to 2%.

Now if you want to invest Long-Term

this is a great option because instead of sitting idle, your money is actually doing something.

You can either invest in Mutual Funds just once

or you can chose a SIP - Systematic Investment Plan

where every month a fixed amount, say Rs. 500/- will move from your Bank Account to Mutual Funds.

Coming to it's parameters. Liquidity is MEDIUM, because it takes around 1-3 days for you to get your money back from Mutual Funds.

Risk is MEDIUM.

'Mutual Funds are subject to market risk. Read the offer document carefully before investing', is correct.

Mutual Funds come with a little bit of risk.

But as long as you do your research and invest in Long-Term, you should be fine.

And returns are also MEDIUM. On an average, in the past, returns have been around 12% to 14%.

If you want to know more about Mutual Funds, check out MutualFundsSahiHai.com

and if you want me to make a separate video explaining how to invest in Mutual Funds,

then comment and let me know.

2. Real-Estate. Is investing in Real-Estate a good option?

Depends.

See, if you buy a house and are staying in it then it is not an asset because it's not making you any money.

But if you buy a house, put it on rent and are using that money to invest somewhere else, then it is an asset.

Buying a house in the city, does not make sense.

Because here the prices are too high, rents are low and a city is pretty stagnant.

But if you buy a house somewhere in the outskirts then there is a possibility

that if civilization moves there, then the price of that house will increase drastically.

So there is a risk.

It may happen. It may never happen.

And if you want to buy a house then a friend of mine Ravi, who works in the Equity Market

and is also pretty great at investments

says that this is something you should decide after you have turned 25.

Because that is when you will have a better understanding of finance,

your future plans, where you want to settle.

Because it's foolish to get tied down to a home loan if you first need money to study abroad.

Coming to it's parameters.

Liquidity is LOW because it takes more than a Year to sell your house and get your money back.

Risk is Medium because you cannot be sure how the price of your house will fluctuate.

And returns are from 0 to Medium, depending on

whether you are staying in it or are putting it out on rent.

Clearly house is not a great investment.

But 'apna' ghar, apna ghar hota hai..

is a sentiment that most of us have, which is the reason why house prices have gone up drastically.

So I am going to tell you how to get your dream house.

But before that, the Bonus part.

Now that we have discussed various Investment options,

I am going to tell you how to divide your money in these investment options to get the best possible returns.

So that you finally have your Dream Education, Dream Vacation and that 'Apna Ghar'.

This is the division.

In cash, you should always have 10K.

Incase you have to pay the maid or any other expenses, 10K is max.

In your Savings Account, keep 50K.

Incase of an emergency, you can just swipe a card and take it out.

Now how much money should you put in your Mutual Funds and FD?

First, make a Monthly Expense sheet and figure out how much money you spend every month.

Lets assume it's 50K.

Now your Mutual Funds and FD together should have atleast 4 Months of your Expenses (i.e 2 Lakhs).

Why 4 Months?

Suppose tomorrow you lose your job.

It will take around 3-4 Months to get re-employed.

And until then, you should have 3-4 Months of expenses, stored as buffer to support you.

Now only after you meet the first 3 criteria, should you even think about buying a Dream House.

Why? I'll tell you.

Let's assume your Dream House costs 1 Crore.

You will get a Home Loan for 80% of the house.

20%, you will have to pay.

Then there will be Registration Cost, Interior Cost that we are not even considering right now.

So if you want to buy a house worth 1 Crore, these are the things that you must already have.

1. 20% of the House Cost which means 20 Lakhs, you should already have in your

Mutual Funds, FD and Savings Account.

2. And the most important point, you should have the ability to pay EMI

for those 80 Lakhs, which is roughly around 80K per month.

I did not do any of these calculations

and still bought a house before turning 25.

See, we belonged to a Middle-Class family.

My mother always wanted a 'Apna Ghar'.

So as soon as I joined a job, I decided,

'I am going to buy my mom a house!'

I spent all my savings, bought a Loan

and I stuck to a job I did not like for 4 more years, just to repay that loan.

And the worst part.

It's a small house at a place far-far away

because at that time, that's all I could afford.

Sometimes, we make foolish financial decisions

not only because we are bogged down by Financial Debts,

but also Emotional Debts.

So incase you are young, explain it to your parents

how it is better to stay at a rented place right now and invest in a Long-Term Plan

instead of being tied to a Home Loan right away.

At 30, I invested in a Second House along with my husband.

It is still not an asset, because are staying in it.

But now we understand Finance better.

So we have our savings and the Home Loan is also going comfortably, hand in hand.