Here is a chance to relook at your portfolio when the spirits are high. While you need a plan to build a house, to build a life, it is even more important to have a financial plan or goal. Having patience and discipline with long term investment horizon would definitively aid you to meet your long term investment goals. In the end as said by Noel Whittaker, the financial expert – “Life is full of uncertainties. Future investment earnings and interest and inflation rates are not known to anybody. However, I can guarantee you one thing. Those who put an investment program in place will have a lot more money when they come to retire than those who never get around to it.”
We have all heard the saying “as you sow so shall you reap”. This stands apt even for the investment decisions we make. As far as investment decisions are concerned most of us tend to procrastinate and make decisions on an ad hoc basis. We have to remember that these decisions will determine what our future would be. The right decisions could help us secure our future and what better time to relook at investments than the New Year. New Year means new resolution. New Year means a whole fresh start. New Year means new promises, new goals and aims. This also applies to the financial goals. As an investor, one should reassess the long term financial plans and make efforts to achieve them.
The most important New Year’s resolution investors can make is to sit down and write out their long term financial goals and then figure out what they have to do to reach them.
– One must keep the goal simple, not too hard to achieve. However, it should not be very simple too. Considering one’s needs, income and expenses, the financial planning has to be done.
– It is advisable to break the goal down into parts and then work towards those individual parts. For eg: If you decide to have an extra saving for the year, instead of saving it all together, you can save some amount every month. This will fit the priorities and lifestyle
Continue making regular savings across asset classes according to the risk profile.
– Once every quarter, review the investments. Make sure it sticks to your risk return profile.
– Follow the 3D principle religiously. Diversify your portfolio. Follow the dollar cost average principle and have discipline in investing
-Prioritize the liability payments – Liabilities or debts with higher interest payments should be paid first. Investing money at the cost of higher interest payment is not a good thing. For eg: Paying of a debt of Rs 20,000 having an interest payment of 15% makes more sense than investing Rs 20,000 earning an interest of 5%. This would save Rs 2000 annually.
-Control the expenses. One should spend less or avoid making unnecessary expenses. If you spend less you’ll have more money available to pay down debt and save for the future. Keep a tab on where and how much you spending. This will help you to decide where expenses can be cut.
Hence, here is a chance to relook at your portfolio when the spirits are high. While you need a plan to build a house, to build a life, it is even more important to have a financial plan or goal. Having patience and discipline with long term investment horizon would definitively aid you to meet your long term investment goals.
In the end as said by Noel Whittaker, the financial expert – Life is full of uncertainties. Future investment earnings and interest and inflation rates are not known to anybody. However, I can guarantee you one thing. Those who put an investment program in place will have a lot more money when they come to retire than those who never get around to it.
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