How to do Savings and Investment

In your life, if you are thinking about savings and investment your first moto is to achieve financial security. Now the question arises what is financial security?

Financial Security:

It means you should have a minimum of 6 months your monthly expenses in your savings bank account or fixed deposit account. It's liquidated in nature. Whenever you need you can withdraw the money. 

In this, you should not think about returns.

For Example:

Your monthly expenses are

 Rs 15000. You should have Rs 15000*6 = Rs 90000.

This money you never use for investment purpose. By this, you will achieve financial security in your life for 6 months.

Financial Stability:

This is the second goal after achieving financial security. You should have a minimum of 3 years of your expenses in your fixed deposits, gold, public provident fund etc.

For Example:

Your monthly expenses are

 Rs 15000. You should have Rs 15000*12*3= to Rs 540000.

Investment:

After achieving financial security and financial stability you can go for investment. Investment should be in the purchase of land, house, stock, bonds etc.

Savings is a money you need in emergencies. Financial Security and Financial Stability is a part of savings. Investment is money which makes more money for you.