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7 habits to achieve financial success

Last updated on: September 25, 2013 18:52 IST

7 habits to achieve financial success

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Rajiv Raj

While these habits definitely apply to the general areas of life they can be actively used in our financial life to achieve success.

Habit 1: Be proactive

Financial success is not a matter of chance. It has to be planned out and acted upon. Being proactive means taking control of your life and responsibility for everything that goes right... or wrong. Be prepared for any emergency by having an emergency fund in place.

Research an investment before putting in any money; do not depend on "hot tips" from neighbours and friends.

Habit 2: Begin with end in mind

Financial goal setting is one of the pillars of financial success. Any financial advisor worth his name will start with helping the investor set short term and long term goals. With the goals in sight the path is easier and smoother.

Habit 3: Put first things first

Prioritise. Be it expenses or investment, it is essential to prioritise. All resources are limited and prioritising helps in optimising the use of your income and investing smartly. It is a natural progression to goal setting. Once the goals are clear then it is easy to allot resources. For instance, if saving up for a holiday is a short term goal, you may prioritise your spending and avoid some non-essential spending for next few months.

The author is a credit expert with 10 years of experience in personal finance and consumer banking industry and another 7 years in credit bureau sector. Rajiv was instrumental in setting up India's first credit bureau, Credit Information Bureau (India) Limited (CIBIL). He has also worked with Citibank, Canara Bank, HDFC Bank, IDBI Bank and Experian in various capacities.


Photographs: Dominic Xavier/Rediff.com

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Habit 4: Think win-win

Financial planning and growth need not be about sacrificing the needs of today for the prosperity of tomorrow. There has to be a balance or else life becomes difficult to live.

For example, it may be a good investment to buy a larger home but it would also mean larger EMIs which will eat out of your current disposable income forcing you to give up many comforts.

The best way to create a win-win situation is to balance the present with the future.

Habit 5: Seek to understand then be understood

Planning your personal finances it is essential to understand the products on the market, your own goals as well as your risk appetite. All these help you reach a decision on which investment strategy will work best for you. Once you have an inner understanding of your financial strategy then it can be conveyed and converted into action.


Photographs: Uttam Ghosh/Rediff.com
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Rajiv Raj

Habit 6: Synergise

Diversity is the cornerstone of investing. It helps to minimise risks and maximise returns. Diversity in investments needs to be a synergy of debt and equity investments. What's more, it needs to be dynamic and ever changing to match your current needs.

When you are younger your portfolio will lean more heavily toward high growth equity stocks whereas as one grows older the portfolio must have a higher debt component in it.

Habit 7: Sharpen the saw

Mind is the sharpest tool that you will ever have. To keep the mind sharp and alert it is essential to hone it with knowledge and skills. Update yourself regularly about your profession to move up the corporate ladder and keep yourself informed about your investments to ensure that they are working hard for you to achieve your goals.


Photographs: Dominic Xavier/Rediff.com
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