Interest money

Manage your money to achieve your goals; not sacrifice them- The New Indian Express

Express press service

Many of you believe that personal finance is about sacrifice. You put off the good things in life today for a better tomorrow. Fierce resistance exists when young people are told to save more and spend less. The urge to spend more decreases with age, but it continues to cause you to have negative thoughts about personal finances.

As you step back and look back on the past year this festive season, you might want to look at personal finance in a new light. Managing your money is more about achieving your financial goals. You need to establish a credible connection between your dreams and your financial goals using personal finance. To do this, think of personal finance as a handy toolkit.

You often keep a toolbox at home to fix things in time. At the same time, you may not be an expert electrician, plumber or carpenter. But, you will do the initial repair of things if they break. Your toolkit will help you tighten screws, check wire ropes, or temporarily fix furniture.

Just as you need to maintain things around the house with timely cleaning, oiling, and maintenance, you need to work on your finances. It’s not a subject you have to study and then take tests. There is no need to burden yourself with having to study personal finance.

Dreams and Goals
Your dreams can translate into financial goals and you can achieve them one by one. Personal finance will show you the way to that dream. Use various tools at your disposal to navigate this path. Financial discipline consists in avoiding indiscretion. As humans, our instinct is to take the easy way out.

Many of you indulge in shopping as therapy. You make choices based on the money in your hands. If you like impulse buying, you can work on providing that. This can be a common short-term goal. If you have a steady income, you can plan your spending in a way that helps you achieve financial independence and indulge regularly.

A primary requirement for taking over money is your ability to create a monthly surplus. If you can manage this regularly, you can invest it in a way that achieves your short and long term goals. Chances are you are confused about dreams and goals. If this is the case, you need to take the help of a professional. A certified financial planner or advisor can help you determine your goals and suggest a plan.

You can apply the “rule of 72” to your investments depending on your goals. It is an essential personal finance tool that you can use. If you divide 72 by the return you expect each year; you will have enough time to double your money. At a 10% annual return, it will take you seven years to double your money.
The safest investments are government securities or postal systems.

They offer a return of 7 to 8% guaranteed by the government. Beyond that, you have to depend on the stock markets to generate a higher return. At the same time, equity assets may underperform in the short term (0-5 years), but they do extremely well in the long term. Plan your asset allocation with the help of your advisor.

Challenges to your goals
There are two types of challenges to your goals. The first concerns external factors. Interest rates and inflation influence your money, and there is a direct correlation. As inflation rises, you have to work harder to beat the heat. As interest rates rise, you need to be prepared for a downturn or a bad day. If you are an impulsive spender, you will need to curb your urge to buy during periods of rising interest rates when inflation is high. First you need to figure out how to save and invest more for your future expenses.

The second factor that challenges your goals is intrinsic. Your ability to take risks will determine the wealth you create for yourself. All asset classes other than those guaranteed by the government carry market risk. Your confidence to earn a regular and higher income in the future will help you take risks.

(The author is editor of www.moneyminute.in)

Many of you believe that personal finance is about sacrifice. You put off the good things in life today for a better tomorrow. Fierce resistance exists when young people are told to save more and spend less. The urge to spend more decreases with age, but it continues to cause you to have negative thoughts about personal finances. As you step back and look back on the past year this festive season, you might want to look at personal finance in a new light. Managing your money is more about achieving your financial goals. You need to establish a credible connection between your dreams and your financial goals using personal finance. To do this, think of personal finance as a handy toolkit. You often keep a toolbox at home to fix things in time. At the same time, you may not be an expert electrician, plumber or carpenter. But, you will do the initial repair of things if they break. Your toolkit will help you tighten screws, check wire ropes, or temporarily fix furniture. Just as you need to maintain things around the house with timely cleaning, oiling, and maintenance, you need to work on your finances. It’s not a subject you have to study and then take tests. There is no need to burden yourself with having to study personal finance. Dreams and Goals Your dreams can translate into financial goals, and you can achieve them one by one. Personal finance will show you the way to that dream. Use various tools at your disposal to navigate this path. Financial discipline consists in avoiding indiscretion. As humans, our instinct is to take the easy way out. Many of you indulge in shopping as therapy. You make choices based on the money in your hands. If you like impulse buying, you can work on providing that. This can be a common short-term goal. If you have a steady income, you can plan your spending in a way that helps you achieve financial independence and indulge regularly. A primary requirement for taking over money is your ability to create a monthly surplus. If you can manage this regularly, you can invest it in a way that achieves your short and long term goals. Chances are you are confused about dreams and goals. If this is the case, you need to take the help of a professional. A certified financial planner or advisor can help you determine your goals and suggest a plan. You can apply the “rule of 72” to your investments depending on your goals. It is an essential personal finance tool that you can use. If you divide 72 by the return you expect each year; you will have enough time to double your money. At a 10% annual return, it will take you seven years to double your money. The safest investments are government securities or postal systems. They offer a return of 7 to 8% guaranteed by the government. Beyond that, you have to depend on the stock markets to generate a higher return. At the same time, equity assets may underperform in the short term (0-5 years), but they do extremely well in the long term. Plan your asset allocation with the help of your advisor. Challenges to your goals There are two types of challenges to your goals. The first concerns external factors. Interest rates and inflation influence your money, and there is a direct correlation. As inflation rises, you have to work harder to beat the heat. As interest rates rise, you need to be prepared for a downturn or a bad day. If you are an impulsive spender, you will need to curb your urge to buy during periods of rising interest rates when inflation is high. First you need to figure out how to save and invest more for your future expenses. The second factor that challenges your goals is intrinsic. Your ability to take risks will determine the wealth you create for yourself. All asset classes other than those guaranteed by the government carry market risk. Your confidence to earn a regular and higher income in the future will help you take risks. (The author is editor of www.moneyminute.in)