ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -"Compound interest is a mathematical explosion. You must start now.” True or False: When it comes to saving money, the amount you save is determined by how much you have left at the end of the month once all of your spending is done. False. You should always pay yourself first.

Detailed explanation-2: -The first step is to earn enough money to cover your basic needs, with some left over for saving. The second step is to manage your spending so that you can maximize your savings. The third step is to invest your money in a variety of different assets so that it’s properly diversified for the long haul.

Detailed explanation-3: -Short-Term Financial Goals: Compound interest builds rapidly over time, making it harder to get out of debt. Paying off debt can make it easier to start saving and working towards your other financial goals.

Detailed explanation-4: -Dave Ramsey says your income is the best way to build wealth, as long as it’s not tied up in debt payments. High-interest debt can prove expensive over time and eat into your disposable income. Increasing the gap between what you earn and what you spend frees up cash for other financial goals.