InvestorQ : what is perfect life in finance?
Gyanendra kandi made post

what is perfect life in finance?

Answer
user profile image
sara Kunju answered.
5 months ago


First of all, I’m afraid but, there is no perfect life, neither in finance nor in any other field. I’m assuming here that by perfect life in finance you mean the financial life that one has, basically, how well you are managing your finance. 

So, it depends on how much you earn, what you spend, how much you save, how much you invest, and your plans for the contingency funds.

Just having enough money or working day or night to earn the money is not financial-wellness. Financial wellness is having money and using your entire intellectual to allocate that earned money to different important aspects of your life, rather than spending what you earn. Now, if you’re thinking that you have invested the money, have some contingency funds, that sounds perfect, isn’t it? I’m afraid it's not.

Financial wellness not only comes from investing, but it also comes from investing in the portfolio, funds, markets that are most suitable for you. Investing without any objective is just like, putting money in a house that you neither plan to live, nor to sell. It’s waste and its relevance would reduce over-time. Therefore, investment in the right funds directed towards the achievement of your short-term and long-term goals is the core of financial well-being, apart from earning money.

Now, another factor that I would like to state is a risk. Yes, you cannot just expect your investment to increase at a great pace without being exposed to some risk. Just like investment and contingency funds, it is also a part of financial well-being. 

Managing debts or credits is yet another key to financial well-being. To be financially happy, one should avoid taking debts, except for the unavoidable circumstances. This would reduce the burden from the person, as sometimes the interest payments are more than the actual principal repayment. So, the sooner you pay the debt, the happier you would be.