Most of our New Year resolutions start by making a health-related choice. Be it deciding to hit the gym, giving out on some food products or achieving a weight goal. But while personal fitness should be a real time goal, so should financial fitness.
By managing your money wisely in 2019 – such as focusing on handling your monthly expenses, loans, insurance premiums and any other expenses in a stress-free manner; you could easily achieve your goal to be financially fit.
Hence, below are a few ways to a (money-wise) fitter 2019!
Target towards purposeful investing
Many individuals confuse aimless investing with purposeful investing. Aimless investing is when you have an Rs. 1,000 SIP that is debited from your bank account every month because your personal banker or agent recommended it to you.
Purposeful investing on the other hand is when you decide that you want to target a fixed amount – say Rs. 2,00,000 over 4 years that can go towards the down payment for your next car. Then you do the math and invest accordingly in an SIP. Setting goals makes investing more focused and resolute. If you have always been ‘simply’ investing; this year invest with clear goals in sight.
Don’t ignore equities
We have all heard that equities have the ability to outperform other assets classes like fixed income, gold, real estate over longer time frames of 10-15 years.
But the last year was a rollercoaster ride, especially where equities were concerned. This was majorly because the markets adjusted and corrected itself to several known as well as unforeseen events. While the markets seemed to hit an all time high around the months of January and February – post Feb the mid-caps started getting shaky. While there was significant volatility in the middle months, towards December markets certainly closed on cheerful note.
So our tip for the next year will be—don’t ignore equities, they may be inconsistent due to certain economic and political factors, but over longer time frames, they can certainly reward investors proportionately.
Track expenses and eliminate unwanted spending
Track all your expenses and figure out the problem area. There may be a number of things on which you are spending unnecessarily. Exercise some restraint when it comes to these expenses and remember that every single dime is important.
Expert Advice is mandatory
Investing is a full time activity that cannot be expected to succeed with part-time attention. It requires an expert to assess your needs, make calculations, study the investment market and then recommend a portfolio to help you realize your goals. Most individuals do not have the expertise or the ‘bandwidth’ to engage in the activity. The best alternative is to engage a competent financial planner to help you with your finances.
Inculcating healthy financial habits will certainly help you go a long way in 2019. Happy Investing!
Rahul Jain, Head, Personal Wealth Advisory, Edelweiss