Friday, June 26, 2015

FIT 101

Decided to attend the savings and investment workshop, called FIT 101, being held by our company.  Below are my notes.  LOL

How much is your net worth?
Do you earn more than you spend?
Are you ready for any emergency?

1.  Compute for your net worth
2.  Review your budget
3.  Savings

Assets - Liabilities = Net Worth

Red flags:
a.  Your net worth is NEGATIVE.
b.  You have very minimal or no cash.
c.  You have cash that can cover for short-term debt.
d.  You do not have insurance, investments or other properties other than your house.

Disposable Income - Expenses = Savings

Red flags:
a. You have ZERO or NEGATIVE savings.
b.  You spend too much on non-essential expenses.
c.  You are paying credit card charges.

Recommended Percentage of Income:
Savings, 5-10%
Rent/ Mortgage, 25-35%

Lifestyle change

1.  Look for Other Income
= find a profitable hobby together
= sell your old and forgotten items
2.  Take out your Savings first
= automate your savings
= make it "inaccessible"
3.  Classify your expenses into
= Needs or Fixed
= Wants or Variable

How to cut your expenses by 10%
* Take it gradually
* Practice delayed gratification
* Look out for redundant expenses

4.  Pay-off your short-term debts
= limit your number of credit cards
= be aware of your debts
= live within your means
= pay in CASH!

Set-up your emergency fund
= 3-6 months of monthly salary
= to be used for non-recurring expenses
= consider paying for insurance premiums

Be inflation sensitive.


Step 1:  Decide on our goal
What is your investment objective?

Step 2:  Determine your tolerance

Step 3:  Discipline yourself
Find our match
Stay invested
Invest regularly


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