Here is what CNBC finance writer Megan Leonhardt has shared about a simple way to manage your personal finances. She divides the process of managing personal finances into
Tracking your spending
Building savings
Investing in your future.
So how much do you need to have saved before you start investing?
These days there's hardly anyone in Mongolia who hasn't heard about crypto coins. If you're getting ready to invest in these instruments, ask yourself the following 3 questions.
Do you have money set aside for emergencies?
If you're about to put all your money into stocks or coins, hold off for a moment, weigh the risks, and keep at least 3-12 months of living expenses aside. Putting in a large amount can bring high returns, but it can also mean a big loss.
Can you leave the money you invest untouched for 2 years or more?
If you think you'll invest today and double your money by tomorrow or the day after, you're badly mistaken. Your investment may pay off only after at least 2 years of ups and downs.
Can you ride out the ups and downs?
Financial markets demand patience and discipline, so you have to ride out price swings caused by external and internal factors. If you suddenly need cash while the market is down and have to sell your investments, you will take a loss. To avoid ending up in that position, keep your emergency money in a savings deposit.
If you answered a confident "Yes" to all three questions, start investing now. If you hesitated and said "No", we recommend the lowest-risk investment options: government and corporate bonds, and savings deposits. Think any high-risk investment decision through carefully and study the market. And once you've decided to invest, prepare yourself for the fact that it won't always be profitable.
