When you are young, even starting to think of planning your finances is half the battle won.

A lot of investors take the obviously smart step of starting SIPs in equity mutual funds. It’s a journey well begun. However, many stop their SIPs after a while and the reasons they cite are quite a few. But not all justify the need to withdraw.

Warren Buffett has a lot to teach, but his lessons are far more apt for the fund managers managing the money of lakhs of investors like us. Whether it’s about choosing fundamentally good businesses or about choosing businesses one understands, his lessons are incredibly important for those whose job it is to choose companies to invest in.

The NAV of a mutual fund being high or low has absolutely no relevance to your decision to invest.

Before we start, let’s consider what is an investment? A definition that I find useful is that an investment is buying something that you will one day sell to pay for expenses.

The money you invest is used by the mutual fund to buy a mix of government or corporate bonds that pay regular interest. The money thus invested in debt funds is relatively safer than equity investments, because the government will always pay back its “debt”!

When you buy units of a debt fund, you essentially help an institution take a loan. Read more to find out how.

Prices go up because every minute of every day, materials are being transformed into products by entities all around you. You’re doing so too, right now in your own company, before you took the break to read this.