Here are six New Year Resolutions which will definitely help you in achieving your financial goals and create wealth in the long run.
New Year Resolution # 1: Finance planning with a fresh perspective
Financial planning is generally taken up during the financial year end (March 31) and clubbed with tax planning. Rather than making it a mundane task taken up to save taxes, resolve to plan with specific financial goals in mind.
Investing for education, saving for marriage related expenses, securing your child’s future financially, planning for retirement are some of the factors to be considered. Of course, these will change as per individual priorities and need to be aligned with their personal financial goals.
New Year Resolution # 2: Have a mind of your own, no more following the herd
Do you pick outfits based on what everyone else is buying at the mall or order what everyone else is eating for dinner that particular evening? Of course not! We choose what our money buys for us basis our research, thoughts and preferences. Then why not follow the same for investments! Invest as per your own research and not based on trends.
New Year Resolution # 3: Invest in value
Quoting Warren Buffet here, “Price is what you pay. Value is what you get.” Resolve to make investment decisions basis value. It will be beneficial to study the various sectors, companies and the overall economy to evaluate the value of the business. Investing in value will be a wise decision in the long run.
New Year Resolution # 4: Invest wherein expenses are low
Often ignored, are the expenses related to investments. Whether trading costs and fund house costs, these need to be taken into consideration when you decide to invest. Considering that most of these investments are long term, these expenses eat up a significant amount from your returns. This can be easily avoided by making a wise choice.
New Year Resolution # 5: Manage risks related to investments
Take a stock of all your investments and the associated risks. This exercise will be an eye opener. Often investments are made over a period of time and we lose focus of the risks associated with independent investments.
Evaluating the same is the first step. This will determine the further course of investments to be made throughout the year. Intelligent risk evaluation will save you from regretting later.
New Year Resolution # 6: Discipline pays off
Put some thoughts together and set a process to execute your investment plan for the year. By that we mean, systematically carving out a specific amount at regular intervals and setting it aside for investments. This could translate into keeping a tab on expenses and planning accordingly so as to invest later. It is not as difficult as it sounds once a habit is formed.
New Year Resolution # 7: You are never too cool for school
And by that, we mean continue being a learner. Resolve to read books on investment strategies; subscribe to financial magazines for updates and talk to the experts. And on your quest to gather valuable financial information and updates, we at CreditVidya promise to help you as we continue to share our insights on finance and investment related topics.
So this time around, resolve to manage your investments better, using the New Year Resolution tips. Systematic and planned investments pay well in the long run and distress your life to a large extent. And if you can do these things, it shall be a very prosperous and happy 2015 indeed.
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.