To increase our income, we should try to invest in different investment avenues available. It is true that to gain more returns, one needs to take higher risks. To mitigate these risks, one can diversify their portfolio. Portfolio diversification means to spread the investments among a number of different asset classes. Diversification lessens the risk arising out of one particular investment with the security that some other investment might provide.

Inflation erodes the purchasing power of money. To withstand inflation, the growth in our money should be higher than the rate of growth in inflation. Inflation rate in India was 4.54% in 2019 i.e. the goods were priced 4.54% higher than what they used to be worth in 2018.

Treasury bills would be considered a risk-free investment. They are backed by the central Government, thus the possibility of loss is negligible. It is a short-term investment, so funds are liquid and can be used in case of exigencies.

Net worth is the difference between the total assets and the total liabilities of an individual. Thus, a net worth statement is required to include all assets.

Debit and credit cards are issued by financial institutions. Debit cards are linked to your savings and current account. While making a transaction using a debit card, the amount to be paid is deducted from your account. It does not allow any credit facility and carries some annual charges. A credit card, on the other hand, allows its holder to make credit transactions. The condition being that the holder repays the amount with interest and extra charges, if any.An annual fees is paid to the credit card company in order to use the credit facility offered.

Inflation refers to the increase in the general price level prevalent in the economy. It erodes the purchasing power of our money. Basically, the more inflation rises, the less our real income is.

Equity investments are highly volatile in nature. They are always subject to market risks. There is an uncertainty about the amount of returns to be earned. It may so happen that the entire investment turns bad and losses are incurred.

A credit record is a detailed history of an individual’s borrowings and debt. A credit score shows the ability of an individual to repay a loan taken. The higher the credit score, the better is the individual’s creditworthiness.

A tax rate of 10% is applicable on LTCG (Long-term Capital Gains) earned on the sale of equity shares and equity-oriented mutual funds.

Making late payments or not being able to repay loans negatively impacts the credit score. It reduces the creditworthiness of a borrower. It also makes difficult to borrow money from financial institutions as they believe that there is higher risk of default on the part of the borrower.

Net Worth is the difference between total assets and total liabilities.Consider asset as anything that puts money in your pocket and liability as anything that takes money out of your pocket. Having more money incoming depicts that you have a better net worth.

accounts are liquid but are not marketable. Liquidity refers to the ability of an asset to be easily converted into cash. Marketability of an asset refers to its capacity to be traded at any given time at a given value. Savings account is highly liquid, but remains untouched by any market fluctuations.

A debenture is a medium to long-term loan taken by companies to raise funds at a fixed rate of interest. The debenture holder is not given any voting rights

Amount received= Principal amount + (principal amount*rate of interest*time)

EMI, or Equated Monthly Instalments, is an amount paid by a borrower against a loan taken. The principal amount of the loan is divided into fixed, smaller parts over several months to facilitate ease of payment. By the end of the period, the borrower pays back the principal amount along with some interest on it.