The Five Most Googled Personal Finance Questions

Here are five of the most Googled questions and my take on them.

1. How to invest money?

This is a common question and this is a good question to ask - this is the first step to attain financial freedom. Thinking and planning about investing is a good start and the common avenues for investment are stocks, bonds, commodities, savings account, property etc. As you might guess, which one to choose depends a lot on your objectives, the amount you want to invest, risk appetite etc. It's best to learn about it by educating yourself and/or consulting a Financial Planner. It's well worth the time and money.

2. How to save money for a house?
Before we get to saving money - which is a quick google search away - the better question might be why do you need a house? Where do you want it? Or how much do you want to spend on it? It's a massive investment and rather than jumping into the "how", it's well worth spending some time on thinking about the "why" and "where" which can save you a lot of time and money.

3. How do income taxes work?

First, let me get this out of the way - Doesn't matter if you're a software engineer, an accountant or a designer - you must be taught (or teach yourself) the basic of how taxes work as it affects your life. The complete answer to this would take more time than a lifetime and it'll still not be complete. However, you can and should know the basics quite quickly. Knowing your after-tax salary, marginal tax rate and tax-shield investments can help you save and spend in a smarter way which your tax accountant or a few google searches can quickly educate you about.


4. How to invest in stocks?
When I see this question, I find it a little concerning. It's great that people want to invest but most people want to get into the stock market to make a quick gain. Trying to pick stocks is extremely risky but the potential of massive and quick rewards plus the relative ease of trading stocks make them a very VERY risky adventure. Attempting to time the market and hoping to beat brokers that invest a ton of resources into building an empire is best avoided. However, you can still profit in the long-term through robo-advisors such as Welathsimple, Questwealth etc. They are much safer and more profitable and do all the work for you for a reasonable management fee which is generally no more than 0.5% in most cases.

5. How much do I need to retire?

The easy answer is - It depends on how much you want, when will you retire, where do you intend to live out your retirement, how much will you spend in retirement, your medical expenses etc. As you can see - it's pretty complicated and hinges on too many variables to get your head around. However, it's a very important question that lets you plan your path to retirement. A common rule of thumb is that you'll need about 70-75% of your pre-retirement annual income during your retirement.
Good luck!