Learn Money Management for Excellent Financial Analysis and Effective Investment Portfolio Management

Learning how to manage your money at an early age helps to ensure a fruitful future. It helps to save a significant amount of money even after having paid all your bills on time. The extra savings can help you to pay off debts faster, ensure a strong pension plan and even help you to enjoy spending on an expensive holiday or a new car.

Read on below to know all you need about money management, how money management can help to inculcate financial analysis and ensure excellent investment portfolio management for a profitable and productive career.


Check out the basic tips for effective money management.

Setting up a budget

Learning to set your budget is the first step towards effective money management. It might seem like a task initially, but it is an excellent way to know how much money you are earning and how much you are spending.

When you set up a budget, you are:

  • Avoiding being in constant debt
  • Preventing unexpected costs
  • Bound to have a better credit rating
  • More likely to get a loan or mortgage
  • Able to find more ways to make savings
  • Able to spend more on luxury and comfort living

How to set up your budget?

Before setting up your budget, you will need to know how much you can afford to spend on:

  • Living costs
  • Household bills
  • Finance products (insurance, investments, etc.)
  • Family and friends (gifts and presents on special occasions)
  • Travel expenses (for the use of car or public transport on a monthly basis)
  • Leisure costs (for eating out, going on holidays, etc.)

One of the best ways to start your budget for excellent money management is to have detailed information about your income and expenses handy with you.

Next, you can see the areas where you can cut costs and the areas where you can save money. This is the main and boosting step towards learning sound money management.

After you’ve learned money management techniques, the next step is to become good at financial planning and analysis.


It is unfortunate that personal financial planning and analysis is not included in our conventional school or college curriculum. This causes many young people to be at a loss when it comes to analyzing their personal finances and planning for a brighter future without the help of professionals.

By definition, personal financial planning and analysis deal with how you mark your budget after carefully taking into account your income and expenses so as to make a sound and successful investment for the future.

If you are not familiar with this, then these are the top ways to become proficient at financial planning and analysis:

Learn how much you earn

The first step towards effective financial planning and analysis requires calculating your total earnings from the salary, the interest on income, your expenses for rent, as well as payment towards shares or mutual fund investments. Taking these into account, you will need to find out the annual value.

In case your household has multiple earning members, then you will need to take into account everyone’s additional income into the equation too.

Accept your expenses

The next step towards successful financial planning and analysis is to calculate the total expenses from your various expenditures, such as rent, medical bills, transport costs, EMI, grocery and utility bills, insurance, maintenance, travelling, cosmetics, fitness, fuel, clothing, and so on.

Basically, you will need to see the difference between the amount of salary you bring home at the start of the month and the amount that remains in your hand at the end of the month after paying off every expense.

Start saving

The main purpose of the above two steps in financial planning and analysis is to help you to start saving. The annual surplus amount (salary, bonuses, commission ( – ) your total expenses) from an entire year should go into savings. You can choose to invest your savings into mutual funds or other similar investment plans.

To make sure that your savings are safest and will get exponentially increased with substantial returns over time, you need to learn the basics of investment analysis and portfolio management skills.


Investment analysis and portfolio management deals with various investment opportunities, selecting and forming the best-suited mix of investment avenues that satisfy your needs. It also involves revising and evaluating the investment portfolio frequently and making any necessary changes to investment choices accordingly.

If you think you cannot do justice to your investments, then it is highly recommended to consult with an expert investment portfolio manager for successful investment analysis and portfolio management.

Let’s take a look at the fundamentals and requirements for successful investment analysis and portfolio management.

What is an Investment Portfolio?

There are various investment options available. Each of these carries different levels of risk and gives a different amount of returns.

To minimize the risk of investment and to ensure maximum profits on return from the investment, it is essential to know investment analysis and portfolio management, which helps to choose the right mix of investment options.

An investment portfolio consists of the selected investment options for each individual.

What are the types of Investment Portfolio?

There are mainly three types of investment portfolios to look at when dealing with investment analysis and portfolio management:

  1. Aggressive Investment Portfolio – This type of investment portfolio includes high-risk investment opportunities with high returns in a short time (such as futures, commodities and other securities).
  2. Defensive Investment Portfolio – This type of investment portfolio deals with stocks that have low risk and safer returns (such as blue-chip stocks, etc.)
  3. Hybrid Investment Portfolio – This type of portfolio consists of a combination of different assets that have high-risk return and low-risk return investment opportunities.

What are the factors for successful Investment Portfolio Management?

Investment analysis and portfolio management should be planned by taking into account several factors that influence investor choice. The top important factors to consider for successful investment portfolio management are:

  • Time period – The period for which the investor is willing to make the investment determines the type of investment suitable for them. Long term investment includes stock and equity, which yield higher returns too.
  • Investor’s age – Another factor to consider before forming an investment portfolio is the age of the investor. This helps to analyze and determine the investor’s risk-taking ability and the yield of returns. Younger investors are more liable to invest in high risk and long-term investments which in turn yield higher returns.
  • Tolerance of risk – One of the major factors to consider while creating an investment portfolio is to determine the risk level, which is acceptable to the individual investor. Low-income investors, or those in their senior years, are less likely to invest in high-risk, high-return, long-term investment opportunities.

How to improve Investment Portfolio?

Investment analysis and portfolio management do not work on a trial-and-error basis. Proper planning and strategizing are the most essential aspects of successful investment portfolio management.

There are three main points that can help to improve any investment portfolio. These are:

  • Diversification – A diversified portfolio helps to keep the balance between high-risk and more secure investment choices which is important to ensure overall lower risk for the investor and increase return on investment at the same time.
  • Asset Allocation – Combining volatile and non-volatile assets is known as asset allocation. Successful investment analysis and portfolio management requires combining high returns with lower risk investments.
  • Rebalancing – Effective investment analysis and portfolio management requires evaluating the investor’s portfolio frequently. This is helpful to revise the ratio of investment in varying asset types and ensures flexibility of investment at the same time.

Author – Bio

Name – Chethana Achar

Hi, I am Chethana. I am an Engineer by profession and a blogger by passion. I like to write, express ideas, feelings, knowledge, and interact with like-minded people and want to learn a lot.

RJ Frometa
Author: RJ Frometa

Head Honcho, Editor in Chief and writer here on VENTS. I don't like walking on the beach, but I love playing the guitar and geeking out about music. I am also a movie maniac and 6 hours sleeper.

About RJ Frometa

Head Honcho, Editor in Chief and writer here on VENTS. I don't like walking on the beach, but I love playing the guitar and geeking out about music. I am also a movie maniac and 6 hours sleeper.

Check Also

Understanding medical malpractice and the law

Medical negligence lawsuits often make headlines, but they can include everything from small injuries to …

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.