10 Money Lessons From 2020

Reading Time: 3 minutes


Emergency Funds Zaroori Hai

The world got some good lesson in understanding the importance of emergency funds. Its a different thing that everyone started making money from trading in stocks 😉😉. The need for hoarding cash has emerged to be the top most priority to take care of job losses, shut down of your business and to pay for unplanned hospital bills. Your insurance may not be enough.

Markets Tank, But They Go Up Too

Timing the markets is a futile business. You don’t know when they could tank nor do you know the heights they could reach. What can you control then? You can control your emotions and focus on your asset allocation. As long as asset allocation is taken care of, you need not worry too much. All will be fine.

Also Read on FinMedium:  3 IPO Mistakes to Avoid While Investing in an IPO

Calculating Past Returns At Peaks And At Troughs Is A Fool’s Game

There will always be deep corrections which will make your 10 year SIPs look useless and there will always be peaks where in a stupid fund manager would look like a genius. This is all noise. Focus on your system. More importantly, focus on your goals. In a goal based system, such analysis shouldn’t matter. If you understand asset allocation and goal based investing, good for you, otherwise, get a financial planner.

Buy The Damn Health Insurance

You were dependent on your employers health insurance but you ended up losing your job and the health insurance. Be wise, always have another health insurance outside of what has been provided by your employer. The benefits are plenty. You will have one less thing to worry about when you lose your job.

You Do Not Need Much To Live

It took a damn pandemic to realise that we can stay at home most of the days and there is barely much needed to live a good life. At one point, my savings rate was 90+% (thanks to my savings rate tracker). Thanks to this realisation, I could quit my job and move my focus on better things.

Also Read on FinMedium:  Valuation in Motion: Harita Seating Systems Valuation: Buying Things Well

What About Term Insurance?

We saw a lot of people (including some we know) dying untimely. I just hope they had adequate insurance to pay for their dependents living expenses. Take it as a lesson and get the a insurance. Please.

Follow The Process, Not The Herd

People started redeeming their mutual fund money just because the performance looked poor in March 2020. Who looks like a fool today? It is always to good to follow a system rather than making decisions based on current events. In personal finance, only few things matter. Right asset allocation, well thought goals, and the right instruments.

Cash Is King

I cannot iterate this enough. Holding a good chunk of cash gives me a sense of comfort like nothing else. Be it a job loss, bear market, or a medical emergency, I know I have a kitty to fall back to.

There is More Than One Way Of Making Money

Necessity knows no law. We saw a lot of folks creating second source of income or replacing their first source of income by monetizing their skills and leveraging internet. I did it too, partly. Were you one of those who started generating income through a second source? Let me know.

Also Read on FinMedium:  The markets are at an all time high, should I invest now or wait?

Personal Finance Management Is An Extremely Crucial Skill

If you knew even the basics of personal finance, you would have been in a better place today. Learning to manage your own money should be a life skill and taught in schools.

Latest Posts



Source link

Every Wednesday and Saturday, we send Info-Graphic and FinMedium Weekly Digest newsletters to our 25000+ Subscribers.

Join Them Now!


Contrarian Living

Contrarian Living

You are being taught the wrong things about money. I learn and share ideas to change the way you think about money.
Please Share :)