Sudhir Sahay is a Sales and Marketing executive and a father of two young men. Sudhir hopes to share his journey building basic financial literacy for his children and providing savings and investing advice to their friends and peers.
Cancel unused fixed costs
Times are tough: inflation is high and a recession is on the horizon. You want to be financially responsible and ready for the oncoming storms so you need to manage your expenses. But, how do you do that without impacting the quality of your life? Today’s post will give you a simple way to get started: canceling unused fixed costs.
Debt: what is it?
When managing one’s finances, most financial advisors recommend that one avoid taking on debt or prioritize paying existing debt down as quickly as possible. But, what is debt? I find that a lot of young people I speak with don’t actually understand what debt is. Today’s post is to explain what debt is, provide examples of common types of debt and why a good rule of thumb for managing finances is to minimize or avoid it.
How to Manage your Credit Score
A key building block of managing your finances is to have a strong credit score. As I shared in my recent article Understanding Your Credit Score, credit scores impact your ability to borrow money such as a car loan, credit card or mortgage. In addition, these scores impact the cost (i.e., the interest rate) of any loans you do get. They can also influence other aspects of your life such as the cost you pay for insurance or even the ability to get a job offer. Given all the ways that credit scores can affect your finances and your life in general, it’s important to maximize your credit score.
Understanding your Credit Score
Credit is the lifeblood of our economy. Most people need to borrow money at some point in their lives - whether it's for a student loan, car loan, mortgage or loan to fund a business. To put yourself in the best position to get an affordable loan, you will need to understand and manage your credit score.
Manage the time you spend on relationships as you do your money
2022 has been a very tough year as we had a number of deaths in my family. As I shared in my article on Investing's Role in Life, understanding what's important in one's life is something everyone should take the time to think about and reevaluate every few years. Getting clarity on and then frequently reminding oneself about what really matters helps with maintaining focus in one's life. In the vein of further diving into what I've realized this year is very important to me - time spent with family and friends - I'd like to talk today about an aspect of our lives which most people don't actively think about and certainly don't put enough emphasis on: time spent on relationships.
Don't follow the Joneses
Too many people spend money they earned to buy things they don’t want to impress people they don’t like. — Will Rogers Fitting in and belonging are core needs for most human beings. They are particularly important during high school and college when we are at the age where we are finding ourselves and identifying our tribe. It is also the time where we are most susceptible to peer pressure as our own sense of self is just being formed.
Balancing active and passive investments
The investing world is very challenging. We are constantly barraged by huge, big-name investment firms telling us to invest our money with them and sharing cherry-picked stories of the happy people who've chosen them. To top that off, they all promote multiple styles of investing, with every one of them having strong long-term results. How does an individual decide which is right for their unique needs? In particular, when it comes to choosing between two diametrically opposed styles of investing: passive versus active.
Active versus Passive Investing
Maximizing investment returns in a safe manner requires balancing a number of tradeoffs. First, what you earn through your investments versus the transaction costs and taxes you have to pay. All else held equal, you want the highest net returns. Second, the balance between the amount of risk you take and expected return — as I talked about in my recent post on balancing safe but boring investments with risky but exciting ones, you want the core of your portfolio to be boring but safe. A key variable for managing those tradeoffs is the mix of your active versus passive investments.