As I interact with lot of investors, I realize that most of them, predominantly in the salaried class have the habit of procrastinating their investments till end of a financial year, precisely to be March. I am not saying that this is completely a wrong practice, but one should check that, how many times have they ended up making a thoughtless investment decision just to satisfy the tax monster, letting the surplus money sleep peacefully in the savings account by earning nominal bank interest and not spreading the money effectively through various timely investment vehicles?
Planning during this year's upcoming fourth quarter is more of adventure than normal as there may be pressure points shooting up from various levels of the organization to achieve targets, performance appraisals, top management visits and what not ! Despite knowing all these, we still manage to make investments randomly and be an impulsive investor.
A two pronged strategy will make your investment decisions unbiased, eliminate forced buying, better liquidity management, life goal oriented .. Last but not the least, it works as your tax saving tool too.
Financial Planning and Disciplined Investing are associated directly with stability and security. Financial Planning is a process that determines how we can best meet our life (Personal as well as Professional) goals, through the proper management of our financial affairs. Disciplined investing is all about mind setting to start investing early during the year. It could be lump sum, bits and pieces, monthly depending on the comfort levels of the investor.
When there are plenty of Financial Advisors, Agents, Relationship Managers presenting you with umpteen investment options, setting a financial goal is the first step to financial freedom which could be short term, medium term and long term respectively.
Short Term goals could be School fees of kids, Purchase of household appliances, Buying tax planning investments like insurance, tax saving funds etc. Foreclosing a loan, Foreign trip, Buying a new vehicle, Saving for buying a property falls into Medium term and thirdly the long term goal which covers building retirement corpus, estate planning, wedding expenses, post retirement living essentially life planning.
To sum up, Financial Planning is like an endowment plan which ensures life goal protection and a sober investment mechanism.
A well thought and systematic investment pays a better interest !
Hope you enjoyed the article - if you have any thoughts or suggestions feel free to add in the comments section.
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