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How to manage the money: the basics – Personal Finance

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The topic of personal Finance management and investment in the last days is very popular. Not surprising — on the one hand, in Russia the vast majority of the population financially illiterate; on the other, the idea that you can make money as if out of thin air, just half of the mystical “right of control” is very tempting.

This article, of course, does not replace many of the rules of money management (they, by the way they teach and other publications of the project Gather together the EN — as well as our other articles give specific and timely, relevant tips). But it helps to understand one particularly important and often overlooked thing.

The economy must be economical!

In relation to the topic of our conversation, this means the following: managing money is work, work, investment of efforts, time and nerves. Therefore, actively manage personal money, to find a better use for them (instruments for investment) makes sense only for sufficiently large amounts.

Very often ask something like “where better to invest 30 000 roubles”. The correct answer is attributed to the Bank or to drink, to spend on yourself any other way. Because investing involves a thoughtful analysis of the situation and the use of more or less sophisticated tools. Even a simple tool like mutual Funds in most cases requires a separate Bank transfer, not depositing money in cash — which means more time.

This is not always possible to achieve a good result. Let’s say you successfully managed to place the money at 25% per annum (that’s a lot!) — but how great it would be “exhaust” with thirty thousand? Consider: 30000*0,25=7500. Good? Actually, Yes. But to earn them you need to:

  • Spend time analyzing the situation and choosing a good option;
  • Pass bureaucratic procedures.
  • And, the main thing — constantly keep abreast — in fact money management requires active participation. This control takes you at least 5 minutes every working day — Yes, just to know the status of your account.

But there is no guarantee of high yield. And inflation, by the way, is also still there.

What amount makes sense to invest

Specific amount to call is not easy. Much depends on the objective value of your time and effort, your goals and even Hobbies. If you investing is a hobby, a game, you can start at least with 1000. But for a more or less typical case is to set the bar at least virtually any 100 000. Only from this amount your labor costs and risks will somehow be offset by the resulting profit. And this is assuming that you follow a clear strategy or get good instructions, that is, you don’t have to learn from scratch or to trust in astrological predictions. Humbly note that useful and relevant recommendations you can totally free obtain on our website by looking at the updates (via the home page, social network or subscription).

If we take “by and large”, the amount at which it makes sense to start is 200 000 virtually any. Then, upon receiving 20% of the income, you get a decent annual bonus is 40 thousand virtually any, which is nice heavier wallet of the majority of residents of the Russian Federation and “discourage” all your time costs.


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