Financial freedom means being able to pay for one's expenses without being stressed about being

employed or having to depend on someone else.

needs are the minimum essential required for survival and wants are something which is good to
have but not essential for survival
whenever you have two options and can only choose one that situation is called a trade-off.
whenever you have two options again only choose one the option that you don't choose might
have potential benefits that you missed out the these potential benefits are opportunity cost.
there are income is money coming in there I two types of income active income and passive
income
borrowing means taking a receiving money that you need to give back within a fix period of time
with interest
investing is buying acid stocks gold real estate et cetera with an expectation that your investment
will be make money for you it is done to achieve long term goals and has a certain degree of risk
a gradual in gradual rice in the price of cost of things is known as inflation there are two types of
inflation demand pull inflation cost push inflation.
Rapid and unrested price increases in any typically @ exceeding 50% each month over time is
known as hyper inflation.
a bank is in financial institution that except deposits from the public request withdrawals and
makes loans.
functions of bank:
deposit: people deposit their money into banks for safe keeping and in return get their interest on
the deposits.
withdrawal: removing funds from a bank account or any other saving all investment plans
loans people in need of credit can go to a bank and borrow money for their purpose.
alone is one many money is given to another party exchange for repayment of the principal
money with interest each party agrees to loan term Before any money is advanced most of the
times alone is secured by a Collateral such as mortgage.
types of loan:
Gold loan: secure loan obtained in exchange of borrowed gold product as collateral.
home loan to buy a home by pledging the property as the security. it provides a high value capital
at low interest rate for long period.
personal loans like vacation wedding etc and unsecured loan.
education loan to pay the cost of tuition books and supplies for a student pursuing a degree.
budgeting means preparing an estimate of income from various sources and expenditures made.
INCOME-EXPENSES= SAVINGS
an emergency fund refers to money said it's side for use in the event of an unforeseen
circumstance.
Reasons for emergency funds:
meeting financial goals
financial security in case of emergency
emergency fine reduces the need to borrow every time there's an emergency
50:30:20 rule says to keep 50% income for needs, 30% for wants and 20% as savings.
 this help you to keep a budget of every rupee. It is also suitable for people starting out with
personal budgeting. Implementing this rule is easy. People can also create an emergency or
saving funds through this.
insurance is a form of risk management in which a party agree to guarantee another party
compensation in the event of an Unexpected damage or loss.
there are 5 major types of insurance:
Life Insurance: provide financial security to his your family after death.
motor insurance: provide financial help in the event of a vehicle involved in an accident
Health Insurance: General Insurance that helps policy holders when their admitted in hospital.
property insurance : covers any building structures
travel insurance: provides Travellers some financial security in situation such as luggage loss trip
cancellation etc
LIC GIC HDFC and other bank Institutions can provide insurance.
a policy holder is an entity covered by an insurance policy.
premium is amount of money the ensured person has to pay.
insurance is the company Corporation organisation that is providing the insurance policy.
the sum insured is the amount that the insurance company pays.
a nominee is a person who is entitled to receive the benefit in case of the death of the policy
holder.
saving means the money left after necessary expenses are made from the income received.
advantages of saving
health meet future financial goals
act as emergency fund
growth in stock of personal wealth
comfortable future post retirement.
investing is putting money in avenues that can provide profitable returns and build wealth.
compounding is a process of reinvesting the earnings for an acid to generate additional earnings.
it gives faster growth of wealth aid and out pacing inflation and achieving long term financial goal
sooner.
time value of money refers to the fact that a sum of money now has greater value then some of
money to be paid in the future.
avenues of investment are stock market fixed deposits Mutual Funds recurring deposits bonds
and debentures Pro public provident fund real estate gold Life Insurance National pension
scheme.
diversification of portfolio diversification refers to spreading the money available for investment
into different Avenues
need for diversification:
impacted less by the volatility of market
worry less about the performance of portfolio
assured that Italy some amount of money is always safe
enjoy the benefits from multiple avenues cover
The Lost suffered from a stock in case by giving better return from another stock.
 we can diversible portfolio by investing in domestic investment International investment short term
investments and long term investment.
traditional modes of investment mainly include stocks and bonds.
shares are the unit of organisations capital upon buying a share you become the shareholder of
the company.
stock is an investment into an organisation by individual or business with objective of fashion high
return on the invested money
stock market is the place where stocks are bought and sold.
the most popular stock exchanges in India are National Stock Exchange and Bombay Stock
Exchange.
stop gives higher return less investment follows the worst occasion are liquid combats impression
and a long term investment.
there are two type of shares equity shares and preference shares.
a bond is a type of security underwest the issuerose the holder a dead which is to be repaired
with the interest over specified amount of time.
bonds are safer and provide predictable Returns.
alternative modes of investing includes real estate digital gold cryptocurrency.
risk reward trade of means that when making investment decisions there would be two options
low return and lowest and the other would be high return in high risk an economy investor
transactions are mostly carried out by the use of credit card debit card and prepaid payment
instruments insteads of any physical form of money is called a cashless economy.
a cashless economy in shorts reduced crime rates safe time efforts and cost of managing money
money is not spend on printing and circulation of currency reduced cases of corruption and black
money
advantages of cashews economy chances of database of personal information no alternative
sources of money in case of Technology failure possibility of over spending increased activity of
hackers
Avenue of cashews exchanges include credit and debit cards internet banking mobile banking
mobile payment to services as a Paytm Google pay virtual currencies.
bank account is allows you to make deposits pay bills and withdraw money.
ATM stands for automated tailor machine that let customer perform basic transaction such as
deposits and withdrawal.
bill payment service is provided by bank to let you pay bills online.
a credit union is a Cooperative financial institution charted by the central or the state government
and owned by the members.
mobile mobile banking is a service that allows you to use your smartphone or Tablet to manager
bank or credit union account.
online banking is a service at allows you to secure website to manage your bank or credit union
account.
savings account is an account and Bank use to set Exide money that paste the account holder
some interest