Everybody wants to be financial
successful. However to become financially successful its not just the money in
your account or investments you made but our habits and behavioral pattern
along with emotional quotient is equally important. Below we have outlines
certain habits which are in build to a
financially successful persons behavior, these are the habits which
streamlines the wealth creation and also preserves it in future.
Planning…Planning anything is the first and most important thing to succeed in any
kind of venture. For Financial success we need to budget our finances, frame
financial goals and decide about time frame to achieve them. Unless we know our
current location and where we wish to reach, we will never be able to figure
out how to reach to the destination. Once we
have planned our goals then we should stick to it until unless there is very
peculiar situation to modify it.
Taking decisions…We can’t sit on the
shore and wish to cross the river. Decision is the key and delay can lead to
monetary losses as well as create confusion and legal hassles. By postponing
important financial decisions we may lead to losses and crises. The cost of
procrastination can dent your financial future by significantly reducing your
corpus for long-term goals. The best way to tackle this bad habit is to prepare
a list of financial task in the descending order of urgency, preferably at the
beginning of each financial year.
Being Proactive…. We should do the research before
making any investment. We are also required to keep track ongoing rules and
regulations, scams and mis-selling so as to avoid losses. Riches are churned
out by people who put in time, effort and money into research, they are
satisfied with being satisfied, and so they seek out the best investing option,
the best career avenue, and the best way to achieve a goal. They do not
compromise on the quality or suitability of a product or service because it
meets their basic needs.
Think twice before action… Many actions cannot
be reversed or cost heavily if we want to change so think twice and wait before
taking action and analyse all pros and cons of attractive options. Be cautious
and understand all aspects Be it buying stocks that have suddenly shot up,
redeeming mutual funds units at the first hint of a market correction, or
changing your job just because you are offered a higher pay package are all
impulsive reactions. Discipline is at the core of any aspect of financial
planning. We should inculcate discipline by sticking to our decisions, strictly
following the initial decided budget, and don't digress from asset allocation.
Review the past decisions/actions… Reviewing/Monitoring
is critical to know if we are on course. In terms of criticality, this habit is
equally important as of planning. A spectacular plan is only 50% of our final objective
because, in the absence of a periodic review of our finances, we may never
reach our goals. Monitoring the portfolio has a three dimensional impact: it
helps to weed out non-performing assets, re-calibrate investments if the goal
seems out of reach, and maintains asset allocation.
Be prudent for debt decisions… Most people need
to borrow for funding current needs/comforts by paying from future income to
secure our future and improve current lifestyle. However it is important to
learn the art of delaying gratifications and considering the impact of our
actions, this is the reason debts are an anathema to most successful people.
While some loans such as those for home and car are virtually inevitable, the
financially prudent prefer to do the cost benefit analysis of these loans and
avoid loans for luxurious items. Beside, stretching loan tenures is not
advisable as it balloons the interest cost despite the tax advantage that some
of them offer. Hence it is best to prepay costly loans at the earliest and
avoid unsecured loans at all cost.
Always remember the risk… Remember there are
various uncertainties and don’t forget to cover them by securing insurance, this
ensures that our dependents and investments are protected, as it is not
possible to predict misfortune but we can have the right tools to tackle the unforeseen
events. This can be done by having the right insurance and contingency in
place. Most successful people ensure that they cover all their risk adequately.
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