Why Financial Education is important


Life is not linear and finances are no different, stability is one thing we try to pursue and achieve in all aspects of our life including money management.

Money management is about managing what you can manage and trying to minimize the losses arising from something that is beyond your control.

This could be anything from recession to a bank collapse to something personal like a job loss, business failure, health crisis, etc.

As much as the aforementioned crises could be attributed to being out of control, working on having your savings and investments well sorted to minimizing losses arising out of such crisis is still within our control.

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Basic Planning

Basic planning would involve understanding your inflows and outflows, the difference between needs and wants.

How you prioritize your spending is the fulcrum on which your future money related issues can be predicted.

It is as simple as being aware that we all need to have an emergency fund, we need to save and invest first and spend later and not being easily influenced as far as spending is concerned.

You save for an emergency fund but you invest for growth, inflation is a lesson better learnt than taught.

If you have an emergency fund then you would not need to touch your investments in case of a crisis like say a job loss, basic planning may seem boring but its impact cannot be understated.

It is better to have it and not need it than to need it and not have it.


Additional reading: Click Here to read about mutual fund mistakes you should avoid making


Financial goals

Segregate your financial goals into different time periods and their priority.

For emergency and short term goals, equity must be avoided at all costs.

For long term goals, investments and products that have the ability to beat inflation consistently should be preferred.

Even financial plan or product carries with itself certain risks and rewards, what works for one may not work for another and therefore it is better to employ the services of a professional to cater to that.

The personal in Personal Finance carries more weight than the Finance.

Segregating your financial goals to a certain extent gives you a sense of direction, no wind is favourable to the sailor unaware of his destination.



The first point to look at prior to investing is whether the product is regulated or not.

When a product is regulated by an act or law it means you have a redressal system to call upon in case things go south.

If not then the chances of recovering your hard earned money in case of say something like fraud is very bleak.

Off late several products and schemes have lured in gullible investors with the bait of high returns but are not regulated.

There is a difference of day and night between greed and growth, your aim when investing should be growth and not greed.


Are you investing in the right mutual funds?


Every investment product has a set of rules that applies once you invest in it.

For eg. With mutual funds you have long term capital gains tax and short term capital gains tax.

A tax saving mutual fund scheme comes with a lock in period of 3 years.

It is important you apprise yourself of the rules that a certain investment product has to comply with and the ones that apply to you, prior to investing so as to avoid any unforeseen events.


Being financially educated can help you avoid many unnecessary pitfalls.

In an ever changing world it is important to keep yourself constantly updated with any new changes that may arise from time to time.

Start early with what you have because proper financial management not only helps with long term wealth creation but also helps you in leading a stress free life, at least as far as finances are concerned.

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Disclaimer : While due precaution has been undertaken in the preparation of this article, The Mutual Fund Guide or any of its authors will not be held liable for any investments based on the above article. The above article should not be considered financial advice and has been published only for your perusal. Due credit has been given in case wherever required, in case you feel any part violates any rights then do get in touch with us and we shall get it duly removed.  
Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing

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