Personal Finance and High School

After graduating high school personal finance is something that is really confusing for students as the restrictions to spending money are reduced some of us might think lets buy a new pair of sneakers and spend 20 or maybe 30 thousand bucks on it not realizing that they are purely depreciating assets or buy the latest I phone not realizing that the change in technology is only 10% each year so there isnt much difference in the features between subsequent models such decisions put the student in debt and decisions that the student will regret later as it only takes a few small holes to sink a ship.

Talking about personal finance particularly for students if we look closely the first steps that you take towards personal finance begin at school only the coupons you get for the Café and this is a common practice among us to save our coupons and pool it for a party at the months end well readers that is mutual funds for you mutual funds is just a group of investors pooling their money for their greater good. Simple isn't it and let me cite one example of someone all of us might be knowing. Warren Buffet had an average compounded return of 33% on his portfolio . On the other hand another investor whose name is John Simmons had an average compounded return of 66% but had started investing from the age of 63 years and is currently 83 while Warren Buffet has been investing for 70 years both of them are billionaires but Warren is wealthier by a really big margin and that is the power of compounding as Albert Einstein said “Compounding is the eighth wonder of the world” but it requires time and patience and most importantly frugality. So the next time you go to buy something that will fulfill your short term desire think how you can use it to solve your long term needs. You can invest through mutual funds by investing in a passive fund by issuing small SIP’s from your pocket money and you will realize how your money will work for itself.

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