5 Financial and Investment
Resolutions to Make This Diwali!
Venkatesan
P, Founder,
Paisacare.in
Phone: 98404 22744
Arn 315388
Celebrate
Diwali with new clothes, sweets and fireworks, but also make meaningful
financial resolutions that can help build a brighter and wealthier future.
A Small
Story... A Big Lesson!
Ramesh and
Suresh were friends working for the same company. Both earned almost the same
salary. Every Diwali, they celebrated with new clothes, family outings and
parties with friends.
However,
there was one important difference between them.
Every
Diwali, Ramesh reviewed his expenses and savings. He made it a priority to save
a portion of his income first and planned his expenses with the remaining
amount. He also invested regularly towards important financial goals such as
his children's higher education, buying a house and retirement.
Suresh, on
the other hand, followed a different approach. He spent his income first and
believed that he could save whatever was left over. As a result, even after
several years, he had not managed to build substantial savings.
Ten years
later, there was a significant difference in their financial positions. Ramesh
had accumulated investments for several financial goals, while Suresh was still
struggling to start saving for his future needs.
The lesson
from this story is simple. Earning a higher income alone does not create
wealth. How we manage, save and invest our income determines our financial
future.
This Diwali,
let us look at five important financial and investment resolutions that can
help us build long-term wealth.
1. I Will
Cut Down on Unnecessary Luxury Expenses!
During
festive occasions such as Diwali, it is natural to feel tempted to buy new
clothes, gold and diamond jewellery, electronic gadgets and household
appliances.
However,
there is a significant difference between buying something we genuinely need
and buying something simply because others are buying it.
Therefore,
as soon as we receive our monthly income, we should allocate money towards
essential expenses, family needs, loan repayments, savings and investments. We
should also set a spending limit for festive purchases in advance.
We must
avoid buying unnecessary products using credit cards and subsequently paying
high interest on outstanding balances. Celebrating festivals joyfully without
creating financial stress is equally important.
2. I Will
Save a Portion of My Income Every Month!
Savings
should not be the money left over after meeting expenses. It should be the
first allocation from our income.
We can set a
target of saving at least 20% of our monthly income. Depending on our current
financial circumstances, we can begin with a smaller amount and gradually
increase it.
Our first
priority should be to build an emergency fund sufficient to meet three to six
months of essential household expenses. This money can be kept in a savings account
or other relatively safe and easily accessible financial instruments.
Once the
emergency fund is in place, we should consistently save and invest towards
long-term goals such as children's higher education, marriage, buying a house
and retirement.
Even small
monthly savings can grow into a substantial corpus over time through
consistency and the power of compounding.
3. I Will
Choose Investments Based on My Future Financial Goals!
Before
making any investment, we should clearly identify why we are investing, when we
will need the money and how much we will require.
Investing
money meant for short-term needs in equity-oriented investments may not be
appropriate. Similarly, keeping all the money required after 15 or 20 years in
low-return savings instruments may limit its growth potential.
For
short-term financial goals, relatively safer investment options, such as bank
deposits and suitable debt mutual funds, can be considered. For long-term
goals, equity-oriented mutual funds may be considered depending on our risk
appetite and investment horizon.
Investing
regularly through a Systematic Investment Plan (SIP) can help investors benefit
from disciplined investing and the power of compounding over the long term.
However, we
must remember that mutual fund investments are subject to market risks and
returns are not guaranteed.
4. I Will
Review My Existing Investments Regularly!
Making an
investment does not mean we should forget about it completely. We should review
our investment portfolio at least once a year.
We need to
examine whether our investments are progressing towards our financial goals,
whether the level of risk is appropriate and whether our money is properly
distributed among different asset classes such as equities, debt instruments
and gold.
If too much
money is concentrated in a single category of investment, we should consider
diversifying the portfolio appropriately.
Our income,
family responsibilities and financial goals may change over time. Therefore,
our investment strategy should also be reviewed and modified whenever
necessary.
5. I Will
Not Make Emotional Decisions Based on Stock Market Fluctuations!
The stock
market does not move in the same direction all the time. It may rise sharply
during certain periods and experience significant corrections during others.
Selling
investments out of fear when markets fall or investing excessively out of greed
when markets rise can lead to poor financial decisions.
Investors
pursuing long-term financial goals should not panic over short-term market
movements. Instead, they should remain disciplined and follow their investment
strategy based on their goals and risk-taking capacity.
At the same
time, blindly continuing with an investment is not advisable. If the
fundamentals of the companies or investment schemes in which we have invested
change significantly, a proper review is essential.
Five
Resolutions... One Wealthier Future!
|
Financial
Resolution |
What
We Should Do |
|
Control Expenses |
Reduce unnecessary and luxury spending. |
|
Increase Savings |
Set aside a portion of our income every month. |
|
Invest Wisely |
Choose investments based on financial goals and time
horizons. |
|
Review Investments |
Evaluate our investment portfolio at least once a year. |
|
Avoid Emotional Decisions |
Remain patient during stock market fluctuations. |
A New
Beginning This Diwali!
Diwali is
the festival of lights, symbolising the victory of light over darkness.
Similarly, we can use this festive occasion as an opportunity to remove
financial uncertainty and unnecessary expenses from our lives and move towards
a brighter future through disciplined savings and investments.
Every rupee
we earn should have a purpose. A portion should help us enjoy our present life,
another portion should protect us against unexpected expenses, and the
remaining portion should help us achieve our future financial goals.
Let us
follow a simple financial principle:
Protection
First... Then Income... And Finally, Growth!
This Diwali,
along with buying new clothes and sweets, let us embrace three valuable habits:
financial discipline, regular savings and planned investments.
After all,
the financial freedom that provides peace of mind throughout our lives is a far
greater wealth than the happiness of celebrating Diwali for just one day!
For
more details and invest
Founder, https://paisacare.in
Mr.
Venkatesan P
Founder, PAISACARE FINANCIAL SERVICES, Chennai
Phone number: 98404 22744
Arn 315388
E Mail id: venkat.profit@gmail.com
Web Site: https://paisacare.in
Mr. P.Venkatesan had a 30 years’
experience in Financial Services (Life Insurance, Health Insurance, Mutual
Funds etc.)
Office
Address:
Paisacare Financial services
No 3B 2nd Street, Sivanandha Nagar
Kolathur, Chennai -600 099
Read articles written by Mr. Mr. P.Venkatesan
in Nanayam Vikatan, a leading personal financial management magazine.
Disclaimer: Mutual Fund investments are subject to
market risks, read all scheme related documents carefully. The past performance
of the mutual funds is not necessarily indicative of future performance of the
schemes.
