Happy Independence day!
As we celebrate our beloved country’s freedom & independence today, we also think about freedom from all our financial worries, being more independent in our financial decisions, making more mindful investments
What are those beliefs & practices which prevent us from achieving our financial freedom?
Traditional products are safe & only good to go for:
Traditional products like bank FDs are simple & familiar. Many of us do believe in them & it’s a ‘go-to’ investment product for us.
However, they are not totally safe & today we have many new age investment products to consider.
Its our belief & attitude which many a times don’t let us accept the facts & we stick to these products only.
We thus, fail to beat inflation, our portfolio lacks diversification & we do not always beat inflation from the returns we get.
New age investment products are too risky:
It is not so!
Every investment product carries its risk. It’s up to us to match our own risk appetite with that of respective investment instrument’s risk level.
When we carefully consider it, understand all the product features well before investing, invest as per the goal; we understand the fact better.
Its necessary to earn big to achieve financial freedom:
Many believe that, if a person is rich & earning big, then only he/she can achieve financial freedom.
But what if, he is earning big but not investing & spending money thoughtfully & not planning his finances?
It doesn’t matter, what is your earning level, if you plan your finances well, invest thoughtfully & spend mindfully, then we all can achieve financial freedom one day.
Relying on single source of income:
When we earn good from our job or profession, we tend to follow the same practice of earning money. We get comfortable in it until some harsh realities & emergencies hit us.
We should not wait for such moment when we are forced to consider alternate source of income.
We can start ‘alternate source’ of income out of our hobbies & skill sets.
Seeking returns from insurance policies:
We always wish for more from our money even if we spend it on buying insurance!
‘return kitna milega?’ is the common question we ask when we spend money on anything & insurance is not an exception. So, we can not simply accept the fact that’ insurance is never an investment’.
If we understand it, we can better opt for a right & suitable insurance policies & invest our money in suitable investment instruments thoughtfully.
Many of us like & believe in possessing certain assets like real estate & are happy to concentrate our money in investing on such.
But this way, we concentrate our investments, make our total portfolio too risky.
Diversification & proper asset allocation give us a risk spread.
We need to understand it now.
Investing with a random approach:
Many of us invest in different instruments, accumulate big portfolios but they have no structure & discipline.
Since we invest randomly, we confuse when to sell, where to invest & reinvest. Its important ot fix up our future goals, & then invest as per goal tenure & risk appetite.
Not being financially aware:
This is last but not the least!
We fail to read & learn the basics of personal finance. We work hard to earn money, but don’t spare time to read & understand about different financial instruments, their features, risk levels, tax implications etc.
We either invest blindly with random approach or believe the talks of the selling person while investing.
Its high time for all of us to be financially aware.
Freedom gives us confidence to do what we actually want. Financial freedom is essential to do so.
Lets be thoughtful & strive to achieve it thoughtfully!