Financial Literacy

CHAPTERS INDEX:
1. Fundamentals of Money
2. Earning
3. Saving and Budgeting
4. Investing

Category Subtopics
Foundations What is money, Importance, Myths, How money is made, Financial terms,
of Money Assets vs. Liabilities, Active vs. Passive Income, Income vs. Expense
Income & How to earn more, Multiple income streams, Investing in oneself, Starting a
Earning business or side hustle
Expenses & Minimizing expenses, Saving money, Saving = Income - Expense,
Saving Budgeting techniques
Basics of investing, Investing in oneself, Fixed Deposits, Recurring
Deposits, PPF, Real Estate, Gold & Silver, Mutual Funds, Index Funds,
ETFs, Stocks, Bonds, Cryptocurrency, Business, Risk management,
Investing Diversification, Market trends
Financial Loans and Debt, Marriage, Child, House, Car, Health, Education,
Planning Electronics
Insurance Health insurance, Life insurance, Car/Bike insurance
Basic math, Percentage, Ratio, Simple interest, Compound interest, Basic
Taxes accounting, Business
1. Fundamentals of Money

1. What is money and why it is important ?

2. Myths and Negative Beliefs about Money
3. How does anybody make Money ?
4. 100 Most Used Financial Terms
○ Assets vs liabilities
○ Active vs Passive Income
○ Income vs Expense
○ Saving & Budgeting
○ investing
○ Loan & Debt
○ Buying vs Renting
○ Credit vs Debit
○ Current Account and Saving Account
5. Growth Mindset / Money Mindset

2. Income or Earning

1. How does anybody make Money ?

2. How to earn more & create multiple income streame
3. Investing in Yourself (Knowledge,Skillset , Mindset & Health)
4. Your Own Business or Side Hustle

3. Savings and Budgeting

1. Income vs Expenses
2. How to minimize expense
3. Expense < income
4. How to save money
5. Saving = income - expense
6. Pay yourself first
7. Simple Budgeting Techniques

4. Chapter 4 -Financial Planning & Loans and Debts

Loans and Debts

Financial Planning
● Marriage
● Child
● House
● Car or Bike
● Health
 ● Education
● Electronic Gadgets
(Computer ,Laptop ,Smartphone , TV , AC , Freez , Washing Machine)

5. insurance
● Health insurance
● Life insurance
● Car or Bike insurance

6. Taxes

7. Basic Maths and Accounting

Basic Maths
● Percentage
● Ratio
● Simple interest
● Compound interest

Basic accounting concepts for investors:

1. Income Statement
2. Balance Sheet
3. Cash Flow Statement
4. Earnings Per Share (EPS)
5. Price-to-Earnings (P/E) Ratio
6. Return on Investment (ROI)
7. Debt-to-Equity Ratio
8. Dividends and Dividend Yield
9. Working Capital
10. Accrual vs. Cash Accounting

8. Investing
Basics investing

1. Investing in Yourself

(Knowledge,Skillset , Mindset & Health)

2. Your Own Business or Side Hustle

3. Fixed Deposits (FD)

4. Recurring Deposits (RD)
5. Public Provident Fund (PPF)
6. Real Estate
7. Gold & Silver (Precious Metals)

8. Mutual Funds
9. Index Funds
10. Exchange-Traded Funds (ETFs)

Advance investing

11. Stocks/Shares
● Growth Stocks
● Blue-Chip Stocks
● Dividend Stocks
12. Bonds & Cryptocurrency
13. Business
14. Risk Management & Diversification
15. Understanding Market Trends

9. Business

The Personal MBA – by Josh Kaufman

[Link] creation – discovering what people need or want, then creating it

[Link] – attracting attention to build demand

[Link] – turning prospective customers into paying customers

 [Link] delivery – giving customers what you’ve promised and ensuring that they’re
satisfied

[Link] – bringing in enough money to make your effort worth while

Top 10 YouTube Channel

CA Rachna Ranade
Finance with Sharan
Ankur Wariko
Pranjal Kamra
Labour Law Adviser
Asset Yogi
Pushkar Raj Thakur
Akshat Shrivastava
Sagar Sinha
Minority Mindset by Jaspreet Singh

Region Channel Name YouTube Channel Link

India Pranjal Kamra Pranjal Kamra
India Yadnya Investment Academy Yadnya Investment Academy
India CA Rachana Phadke Ranade CA Rachana Phadke Ranade
India Invest Aaj For Kal Invest Aaj For Kal
India Market Gurukul Market Gurukul
World Graham Stephan Graham Stephan
World Andrei Jikh Andrei Jikh
World The Financial Diet The Financial Diet
World Minority Mindset Minority Mindset
World Nate O'Brien Nate O'Brien

These channels provide valuable insights and education on various aspects of personal finance,
investing, and financial planning.
Chapter 1- Fundamentals of Money

[Link] is money and why it important ?

● Money is a medium of exchange used to buy and sell goods and services.
● It helps facilitate trade by eliminating the need for bartering.
● Importance of Money:
○ Allows efficient trade and exchange.
○ Acts as a store of value, preserving wealth over time.
○ Serves as a unit of account, measuring the value of goods and services.
○ Promotes economic growth and stability by enabling businesses and individuals
to plan and invest.

[Link] and Negative Beliefs about Money

Negative Beliefs about Money

1. Paise ped pe nahi lagte h
2. Paisa kamana bahut mushkil h
3. Paisa to hath ka mail h
4. Money can't buy happiness
5. Amir log do no. Ka kaam karte h
6. Amir log chor h, dakait h, gunde h
7. Amir log rude h conjus h

Positive Beliefs about Money

1. Paise ped pe lagte h

2. Paisa kamana bahut aasan h
3. Paisa to bahut powerful h
4. Money can buy happiness
5. Amir log achhe kaam bhi karte h
6. Amir log helpful bhi hote h
7. Amir log paisa waste nhi karte h
Positive Affirmation about Money

● Money grows on trees.

● it's very easy to make money.
● Money is very powerful.
● Money can buy happiness.
● Rich people do good things as well.
● Rich people are helpful too.
● I am worthy of the wealth I desire.
● I am financially free.
● I am grateful for the money I have.
● I am a money magnet.
● Money comes to me in expected and unexpected ways.
● I am open to receiving money.
● I attract money easily and effortlessly.
● I believe there is enough money for everyone.
● Money is my friend
● i love money
● Money gives u power to do whatever u want whenever u want
● I am making money by doing what i love doing
● Money Gives Freedom
● Money Gives you Financial Freedom, Time Freedom, Location Freedom, Energy
Freedom.
● My income is rising at a rapid rate.
● I love money and money loves me.
● I am worthy of making more money than ever before.
● I give more value to others than the Money they give meme.
● My income exceeds my expenses.
● I deserve to be paid for my skills, time and knowledge
● I am worthy of all the richness I desire

3. How Does Anybody Make Money?

● Exchange of Value:
 ○ You get paid for adding value.
○ Value comes from providing:
■ Products or Services (Solutions to Problems)
■ Knowledge or Skills (Expertise)
● Problem-Solution Model:
○ Identify a problem (business opportunity).
○ Offer a solution (value addition) through products or services.

How Does Anybody Make Money?

Making money is fundamentally about the "exchange of value." People get paid when they
add value to others or businesses. Here's a breakdown of how it works:

1. Exchange of Value:

● Value refers to what you offer that others find useful or necessary. This value can come
in two main forms:
○ Products or Services: These are tangible or intangible solutions that address a
problem. For example, a product like a smartphone solves communication and
convenience issues, while a service like car repair addresses the need for vehicle
maintenance.
○ Knowledge or Skills: This involves offering expertise or specific knowledge that
others may not have, like consulting, teaching, or technical skills.
● You get paid by providing value to others, whether through goods, services, or
expertise.

2. Problem-Solution Model:

● Identify a Problem: Every business or opportunity begins with a problem. This problem
can be anything people or businesses need help with.

● Offer a Solution: Once the problem is identified, you offer a solution by creating
products, services, or providing knowledge that helps solve that problem. The solution is
the value addition that you are compensated for.

● The exchange of value is where you solve a problem (business opportunity) and in
return, you get paid for your solution.

3. Knowledge, Skill, and Attitude:

 ● Knowledge: The more knowledge you have, the better you can identify problems and
create solutions that people are willing to pay for.
● Skill: Having the skill to deliver your solution effectively, whether it's through the creation
of a product or the ability to provide a service.
● Attitude: A positive, growth-oriented attitude helps you overcome challenges and
continuously improve to add more value.

You get paid for value Addition

Value Addition
Problem (Business Opportunities)
Solution
(Value Addition through products/services)

increase Revenue

To increase income/revenue either u increase the price of the product/services or increase the
volume of sales

Find out the problem

Magnify the problem
Solve the problem

In summary, to make money, you must identify a problem, offer a valuable solution through
products, services, or expertise, and ensure you have the knowledge, skills, and the right
attitude to deliver that solution effectively.

4) 100 commonly used and important financial terms

General Finance Terms

1. Asset – Something valuable you own, like cash, property, or investments.

2. Liability – A debt or obligation you owe to others.
3. Equity – The value left after subtracting liabilities from assets.
4. Net Worth – Your total assets minus your total debts.
5. Liquidity – How quickly you can turn an asset into cash.
6. Interest – The cost you pay for borrowing money, or the money you earn on
savings.
7. Principal – The original amount of money borrowed or invested.
 8. Compound Interest – Earning interest on both your initial amount and the interest
already earned.
9. Simple Interest – Interest earned only on the original amount.
10. Capital – Money used to start or grow a business or investment.

Banking Terms

11. Checking Account – A bank account for everyday spending and transactions.
12. Savings Account – A bank account for saving money and earning interest.
13. Overdraft – Spending more money than you have in your account.
14. Certificate of Deposit (CD) – A savings account with a fixed term and higher
interest rate.
15. ATM (Automated Teller Machine) – A machine to withdraw or deposit money using
a bank card.
16. Bank Statement – A summary of your bank account activities.
17. Wire Transfer – Sending money electronically from one bank to another.
18. Routing Number – A bank’s unique code used for identifying transactions.
19. Direct Deposit – Getting your paycheck automatically deposited into your bank
account.
20. Mobile Banking – Managing your bank account through a smartphone app.

Investment Terms

21. Stock – A share of ownership in a company.

22. Bond – A loan you give to a company or government, which pays you back with
interest.
23. Dividend – A portion of a company’s profit paid to its shareholders.
24. Portfolio – All the investments you own.
25. Mutual Fund – A pool of money from different people invested in a variety of
assets.
26. ETF (Exchange-Traded Fund) – A fund that trades on a stock exchange like a
stock.
27. Index Fund – A fund that tracks the performance of a specific market index (e.g.,
S&P 500).
28. Capital Gain – Profit from selling an investment for more than you paid.
29. Capital Loss – Loss from selling an investment for less than you paid.
30. Return on Investment (ROI) – The profit you make on an investment compared to
the cost.
Retirement Terms

31. 401(k) – A retirement savings plan offered by employers.

32. IRA (Individual Retirement Account) – A personal retirement savings account.
33. Roth IRA – A retirement account where withdrawals are tax-free if you meet
conditions.
34. Pension – A regular income paid after retirement by your employer.
35. Annuity – A financial product that pays a fixed amount regularly, usually during
retirement.
36. Retirement Age – The age when you can start receiving retirement benefits (e.g.,
65).
37. Social Security – A government program that provides retirement income.
38. Defined Benefit Plan – A retirement plan where you get a set monthly payment.
39. Defined Contribution Plan – A retirement plan where you contribute, like a 401(k).
40. Vesting – The time you need to work before fully owning your retirement benefits.

Debt & Credit Terms

41. Debt – Money you owe to someone.

42. Credit – Borrowing money to be paid back later.
43. Credit Score – A number showing how well you manage debt.
44. Credit Limit – The maximum amount you can borrow on a credit card.
45. APR (Annual Percentage Rate) – The yearly interest rate on a loan or credit card.
46. Loan Term – How long you have to repay a loan.
47. Installment Loan – A loan paid back in fixed, regular payments.
48. Mortgage – A loan used to buy a home.
49. Refinance – Replacing a loan with a new one to get better terms.
50. Default – Failing to repay a debt on time.

Budgeting & Personal Finance Terms

51. Budget – A plan for how you spend and save your money.
52. Expense – Money you spend on things or services.
53. Income – Money you earn from work or investments.
54. Emergency Fund – Money saved for unexpected expenses.
55. Fixed Expenses – Costs that stay the same every month (e.g., rent).
56. Variable Expenses – Costs that change each month (e.g., groceries).
57. Discretionary Spending – Non-essential spending (e.g., entertainment).
58. Net Income – Income left after taxes and deductions.
59. Gross Income – Total income before taxes and deductions.
60. Paycheck – The money you get from your employer after deductions.
Taxes

61. Tax Deduction – An expense that lowers your taxable income.

62. Tax Credit – A dollar-for-dollar reduction in your taxes owed.
63. Income Tax – A tax on your earnings.
64. Sales Tax – A tax on goods and services you buy.
65. Capital Gains Tax – Tax on profits from selling investments.
66. Property Tax – Tax on property you own.
67. Withholding – Money taken out of your paycheck for taxes.
68. Tax Bracket – A range of income taxed at a specific rate.
69. Filing Status – Your tax classification (e.g., single, married).
70. W-2 Form – A document showing your annual earnings and taxes paid.

Insurance Terms

71. Premium – The cost you pay for insurance coverage.

72. Deductible – The amount you pay before insurance covers the rest.
73. Policy – A contract outlining your insurance coverage.
74. Claim – A request for payment from your insurance provider.
75. Health Insurance – Coverage for medical expenses.
76. Life Insurance – Pays a sum of money to your beneficiaries if you die.
77. Auto Insurance – Protects against car-related losses.
78. Homeowners Insurance – Protects your home from damage or loss.
79. Liability Insurance – Covers costs if you're responsible for harm to others.
80. Co-Payment (Co-Pay) – A fixed fee you pay for a covered medical service.

Economic Terms

81. Inflation – When prices rise over time.

82. Deflation – When prices decrease over time.
83. Recession – A period of economic decline.
84. Depression – A long, severe economic downturn.
85. GDP (Gross Domestic Product) – The total value of goods and services a country
produces.
86. Unemployment Rate – The percentage of people without jobs.
87. Supply and Demand – The relationship between availability and desire for goods.
88. Currency – Money used in a specific country.
89. Exchange Rate – The value of one currency compared to another.
90. Interest Rate – The cost of borrowing money or the reward for saving money.
Other Financial Terms

91. Net Profit – Earnings after all expenses are paid.

92. Gross Profit – Earnings before subtracting expenses.
93. Revenue – Total income from sales or services.
94. Expense Ratio – The cost of managing an investment fund.
95. Diversification – Spreading investments to reduce risk.
96. Risk Tolerance – How much risk you can handle in investments.
97. Yield – The earnings from an investment, usually expressed as a percentage.
98. Hedge – An investment strategy to protect against losses.
99. Bear Market – A market where prices are falling.
100. Bull Market – A market where prices are rising.

These terms cover essential concepts in both personal and general finance!

Core Concepts

● Income vs. Expenses:

○ Income: Money you earn (salary, business revenue, investments).
○ Expenses: Money you spend (rent, bills, groceries).
● Assets vs. Liabilities:
○ Assets: Put money in your pocket (investments, real estate, businesses).
○ Liabilities: Take money out of your pocket (loans, debt, expenses).
● Budgeting:
○ Track income and expenses.
○ Plan spending and saving to achieve financial goals.
● Active vs. Passive Income:
○ Active Income: Earned by working (salary, freelance work).
○ Passive Income: Earned with little to no effort after initial setup (investments,
rental income).

Assets and Liabilities

Assets put money in your pockets, while Liabilities take money from your pockets

Active income & Passive income

Active income

Need to work always to get money

If you stop working you will get no money

For [Link] , Self Employee etc

Active income is money you make by actively participating in work

Passive income

Need No or little work to get money

Even if you stop working you will going to

get money

For [Link], investments, Assets, Royalties, Rental income etc

Passive income refers to money earned with little or no effort

Passive income is money earned on an investment, or work completed in the past, that
continues to make money without any additional effort.
Absolute income and Relative income

Absolute income
the amount of money that an individual is getting for his work without considering other factors
such as income, expense, cost of living

Relative income
the amount of money that an individual is getting for his work after considering other factors
such as income, expense, cost of living

Relative income = Absolute income - Expense

Balance Sheet, income statement, Cash Flow Statement

What is a balance sheet in accounting ?

A balance sheet is a statement of a business's assets, liabilities, and owner's equity as of any
given date.

What is an income statement in accounting?

An income statement shows a company's revenues, expenses and profitability over a period of
time.

What is a cash flow statement in accounting ?

A cash flow statement is a financial statement that provides aggregate data regarding all cash
inflows a company receives from its ongoing operations and external investment sources. It also
includes all cash outflows that pay for business activities and investments during a given period.

Financial Security

● Next 6 Months expense

● FD or PPF
● Cash / Liquids
● You can access whenever u want

Financial Stability

● Next 3 to 5 Year expense

● FD or PPF
● Cash / Liquids
● You can access whenever u want

Financial Freedom

What is Financial Freedom

You have enough monthly passive income than your monthly expense for the rest of your life.

INCOME >>>>>>EXPENSE

Your Expense should always be less than your income

Whenever you want to increase your monthly expense first of all you need to increase your
monthly income to maintain your financial Freedom for rest of life

● Built & Maximize Multiple Assets with passive income

● Multiple Source of passive income
● Minimum or No Liabilities
● Maximize income
● Minimize expense
● No Branded Car, House, Clothes, Gadgets etc
● Income >>>Expense

[Link] Mindset / Money Mindset

–

Chapter 2-Income or Earning

Types of Income

● Active Income:
○ Requires continuous effort and time.
○ Examples: Employment, Freelancing, Self-Employment.
● Passive Income:
○ Generates money with minimal effort after setup.
○ Examples: Investments, Royalties, Rental Income, Business Revenue.

Strategies to Increase Earnings

1. Upgrade Skills:
○ Gain certifications (e.g., CompTIA A+, CCNA).
○ Enhance communication, public speaking, and technical skills.
2. Identify High-Demand Opportunities:
○ Problem-solving products or services.
○ Niche markets in tech, finance, or content creation.
3. Multiple Income Streams:
○ Combine active and passive income sources.

1. How does anybody make Money ?

2. How to earn more & create multiple income streame

 3. Investing in Yourself (Knowledge,Skillset , Mindset & Health)

4. Your Own Business or Side Hustle

Business
The Personal MBA – by Josh Kaufman

[Link] creation – discovering what people need or want, then creating it

[Link] – attracting attention to build demand

[Link] – turning prospective customers into paying customers

[Link] delivery – giving customers what you’ve promised and ensuring that they’re satisfied

[Link] – bringing in enough money to make your effort worth while

4 Types of Freedom

1. Financial Freedom
2. Time Freedom
3. Location Freedom
4. Mind Freedom (inner freedom)
(Living in the present moment)
Chapter 3 - Savings and Budgeting

1. Financial Security
2. Financial Stability

First Financial Security than Financial Stability

Than you can go for Financial Freedom

1. Financial Security
2. Financial Stability
3. Financial Freedom

Best investments is self investments

Your own mind, body, people, business

Why is self investment the best investment?

Investing in yourself will boost your confidence in your own abilities and have a positive impact
on your self-esteem.

Warren Buffett said, “The best investment you can make, is an investment in yourself. The more
you learn, the more you'll earn.”

Evergreen investments
Land (Not flats)
Gold and Silver

Types of Assets
Sudo Assets - We think as an assets but r Liabilities
Fixed Assets - long term assets cant convert to cash immidiatly
Liquid Assets- Cash

1. Importance of Saving

● Financial Security:
○ Save enough to cover 6 months of expenses.
● Financial Stability:
○ Save for 3-5 years of expenses for long-term stability.

2. Saving Strategies
 1. Pay Yourself First:
○ Automatically allocate a portion of your income to savings.
2. Emergency Fund:
○ Set aside funds for unexpected expenses (medical, repairs).
3. Budgeting:
○ Track and reduce unnecessary expenses.
4. Avoid Liabilities:
○ Limit purchases of branded and luxury items.

3. Saving Tools

● Fixed Deposits (FD)

● Recurring Deposits (RD)
● Public Provident Fund (PPF)
● Cash/Liquid Savings (accessible anytime)

Chapter 4 -Financial Planning & Loans and Debts

Emergency -You can

Liabilities -BIG NO if you want to Buy Big branded House, Car, Phones, Laptops, Computers,
Clothes, Gadgets etc

Whether you Should buy Big Brands

or Not- Big No
Brand Association - Showoff
Branded and Costly products same value products same quality products u can buy cheaper
alternative
Buy Needs do not buy brands

Understand Need vs wants vs demand

Need vs Wants
Need, want, demand seems to be very closely related words, however they all differ with
respect to their meaning.
Need - necessity. Something that is required to survive or to sustain. For example, food, water,
shelter etc.
Want - desires. Things without which we can survive, but we need them for higher satisfaction.
For example, i want iphone 6S, though I can do without it.
(Human wants are unlimited! As one want is satisfied, a new one is created.)
Demand - willing and able to buy. Things that you want to buy/consume and your pocket allows
its consumption, i.e you can afford it, thus you demand that thing. For example, I have Rs. 1000
in my pocket and I want to see a movie whose ticket is worth Rs 500, since I want it and I can
afford it, I demand a movie ticket.

Need is hunger; want is a cheese burst pizza.

Need is to sleep at night; want is to sleep in an air conditioner.

Need is thirst; want is a sweetened cold drink with fizz and caffeine.

Need is to be loved; want is to be a priority above everything.

Need is to earn; want is to be a millionaire.

Need is to rest; want is an exotic holiday.

Need is to be accepted; want is to be appreciated.

Need is to survive; want is to succeed.

Need is to forgive and get over; want is revenge.

Need is recognition; want is fame.

Marriage - Minimize the expense

Kids - Minimum (1/2) - Expense

investments
First Saving than investments

Share Market, Mutual funds, Crypto currency

No firstly achieve financial Security and Stability than go for share market, mutual funds and
crypto currency

Investment only the amount of Money which loss u can bear if all the money you invested in
share market, mutual funds, crypto currency is lost
You can bear the loss of Money

If u have Achieved financial Security, financial Stability than you can invest the portion or
fraction of your investments in stocks, share market, cryptocurrency, mutual funds bcoz u know
high risk high reward

No Risk No Reward
Low Risk Low Reward
High Risk High Reward

Price - Group Agreement

Bandar Story

When multiple people say same price we accept

Multiple people saying same thing we accept as a truth
Very risky
U dont have direct control
Investment in ur own Business, ur own self, invest in land or Gold

I m not going to let go hard earned money

First safty & Security than Stability
Than first invest in ur own business, invest in land, Gold, invest in ur own self

Investment in Assets and more of liquid Assets

Which gives u monthly or yearly income in the form of interest , rent, pension, royalty, Products
or Services, Business, digital products or services, website,social media following, software etc

Assets which give u monthly or yearly liquid/Cash. Liquid Assets must be ur priority

Built long term assets as well business, products or services, Gold or Silver, property and land
etc cant give u immediate cash bjt can give u good or great ROI in long term after
1,2,5,10,15,20 years.

Retire 60
FIRE - Financially independent retire early
Mini retirement is best

1. Why Invest?

● Grow Wealth:
○ Investments can outpace inflation and increase wealth over time.
● Financial Freedom:
○ Build passive income streams that exceed monthly expenses.

2. Types of Investments

1. Low-Risk Investments:

○ Fixed Deposits (FD)

○ Public Provident Fund (PPF)
○ Government Bonds
2. Moderate to High-Risk Investments:

○ Mutual Funds
○ Stocks/Equities
 ○ Gold & Silver
○ Real Estate
3. Alternative Investments:

○ Cryptocurrency (High Risk, High Reward)

○ Business Ventures
○ Digital Products (e.g., courses, e-books)

3. Investment Guidelines

1. Prioritize Financial Security & Stability:

○ Achieve security and stability before high-risk investments.
2. Risk Management:
○ Only invest what you can afford to lose.
3. Diversify:
○ Spread investments across multiple asset types to reduce risk.

4. Evergreen Investments

● Land (Not Flats)

● Gold & Silver
● Self-Investment (Skills, Education, Health)
● Business or Side Hustle