5. Know Your Magic Number

All people have a unique ‘Magic Number.’ This is nothing but a sum of money that will make you break free from your financial woes. In other words, it denotes an amount of money you will need to live a happy and full life with your loved ones. It is also called your retirement fund but Magic number sounds better. This number can be a staggering one and might even shock you but it depends on one’s lifestyle and so is subjective. The only way to achieve this is to start and plan early. Start during your late 20s to early 30s and invest and save wisely. Do not become a Scrooge but also don’t gamble with your money. Saving money through little things will reap big rewards in the future. As all investments are subject to market risk, taking help of a financial planner is good too. You might have to pay a bit more but your investment decisions will be rock solid. Do not count your expenses alone in this number. You will have to include all sources of financial outflows, like EMIs, insurance premiums and investments. Personal FN has a Magic Number Calculator. So, if you like, you can check it out.