Five mistakes to avoid in your early career

To be financially independent and autonomous is one of the important goal in everyone's life. In achieving the financial goals we, unknowingly or due to lack of knowledge, do many mistakes, and believe me we pay heavily for those mistakes. Through this article, I would like to share with you about few important things, so you can think before making crucial financial decisions and make your life successful.   

1.  Investments in buying home early: It is everyone's dream to buy a home or flat as soon as we start earning. But hold on, have you ever done a little maths and some study before you invest in a home very early. Let us take an example, you buy a flat worth Rs. 60Lacks which is a reasonable price of a new flat today in most metro cities. You opt for a homeloan say for 20 years, and your EMI will be Rs. 54000 for 20 years at 9% interest which can be calculated at http://emicalculator.net/. So at the end of 20 years you end-up with paying Rs. 12956054 out of which around Rs. 7000000 is interest only. You might be thinking whats new here, we all know this. Now consider, you postpone buying your home by few years say 5-7 years, and instead live in a rented house where you pay Rs.20000 rent. Interesting part is here- You invest the rest of the money from your supposed EMI of Rs. 54000 which comes to Rs. 34000 per month in to a mutual fund. Now you can refer any mutual fund returns calculation website such as http://www.moneycontrol.com/mutualfundindia/. If you see past records of most of mutual funds performances, A good mutual fund will give you anywhere between 25 to 45%  minimum returns annually. Not only that, over the years it gets compounded. Here you generate a good corpus in five years to buy your sweet home, may be with a very much reduced EMI, since now you have a bulk amount savings with you. 
2.  Buying a fascinating car in early carrier: Please remember,  things are always relative. Some one with a good financial backings may not find these factors relevant. Now, buying a car has become a necessity in the bigger cities. The important reason for buying a car I give is - safety. So you should buy a car for yours and your family's safety. But the catch here again is, instead of buying a big car & investing heavily in that, I would consider buying a small car for few initial years. I will tell you some benefits of doing it that way. First is, you can have surplus amount of money  in your hand by buying a small car and you can utilize this amount or invest it wisely. Second, you or your spouse may be newly learning the car and may find it difficult to drive big car initially and also chances to have scratches and damage will be more. So the car's value will go down quickly. With big car depreciation loss will be more. So buy a small car, use it for few years, get your hands on it and then sell it and buy bigger one !
3.  Health Insurance and health checks : We all say that health is wealth, and it is literally true.We all buy a good life insurance policy, but today health insurance is very important. The hospital expenses have become very high now a days. Fortunately, most of the corporate employees are covered with some health insurance but they vary in their coverage, so understand the policy well. Make sure each one of your dependent member is covered in health insurance to avoid sudden burden of illness expenditure. Similarly, regularly do health checks specially parents should do health check at least once in a year.
4. Diversify your income: This one is most important. Never ever invest all your money at one place. Diversify it in various investing opportunities.  Ideally it should be combination of Mutual funds or stocks, land, gold and liquid cash. Proportion of each investment must be decided based on individual's ability to take risk and his knowledge in various opportunities. But make it more diversified, it will minimize the risk. 
5. Get Knowledge:  This one is equally important. You should spend some time to gain more knowledge. Read more and more about investing & things that fascinates you. Personally I read more about Stocks and Mutual funds and believe me its very addictive. You can also use https://www.youtube.com/results?search_query=investment+ideas. All the best and happy investing !