Basic Financial Concept

  

Hello everyone,

, I am Aman Kumar Happy. I write a blog, Aman Kumar Happy (Fintech), with a fantastic blog where I will explain some basic financial concepts that everyone should know.

1. Net Worth

First, let's talk about net worth. To understand it, let's say you own some cars worth a total of one crore rupees but have a loan of twenty lakh rupees. So his net worth would be eighty lakh rupees.The simple formula for net worth is assets minus liabilities.

2. Life insurance and health insurance

Now let's talk about life insurance and health insurance. Life insurance pays out the payout in the event of death and makes the money available to your named beneficiary. There are different types such as term life insurance, universal insurance, and whole life insurance, but I recommend term life insurance.Health insurance covers medical bills and hospitalization expenses.

3.Emergency Fund

Next, let's talk about the emergency fund. This is the amount you should have saved to cover your expenses for the next six months if you lose your job. You can keep this money as cash, invest in assets, or keep it in a savings account.4.Liquidity

Now let's understand liquidity. Liquidity refers to assets that can be converted quickly and easily without affecting their price.

5.Inflation

Let's now come to inflation: It is the increase in prices over time.To calculate this, we use a formula based on the starting and ending prices of a product.

6.CAGR (Compound Annual Growth Rate)
Next we have the concept of CAGR (Compound Annual Growth Rate) which helps in determining the average annual growth of an investment. You can calculate it using a formula or use online calculators like Finology's CAGR calculator.

7.Bulls and Bears

Now let's talk about the bulls and bears in the stock market. Bulls refer to rising markets where stock prices are continually rising, while bears refer to falling markets where prices are continually falling.

8. Risk Tolerance

Finally, we have risk tolerance, which is the amount of risk that an investor can tolerate. For effective risk management, it is important to diversify your investments across different assets.If you enjoyed the video, like and subscribe to the channel for more finance-related content and to stay updated on new technologies. If you have any questions, feel free to ask them in the comments or message me directly. That's all for today, goodbye and take care.