7 Important Financial Principles

1. Find ways to increase your earning potential, every year. Learn new skills. Sharpen your existing skills. It’ll help you earn more.

2. Own your home. Renting is costly. In the long run- Owned home is an asset. Rent is an expenditure.

3. Protect your capital. In investing, capital is the weapon. If the weapon is lost, you lose the war. Preserve capital. Returns will come.

4. Understand the risks well before you invest. Ignoring risk is attracting risk.

5. Never lend money unless you’re a bank. It’ll only cause humiliation. When you lend, you lose both money & relation. Only lend that much which you can afford to lose. Lend wisely.

6. Try to avoid debt for consumption. Avoid borrowings to purchase depreciating assets. You’ll take a hit via paying interest as well as losing the value of deprecating asset. Debt is good for running a business.

7. Insurance helps when nobody does. Get a life & health insurance. Emergency can knock you anytime. It’s always better to be protected. Also, it’ll bring you a good night sleep.