Investment Planning

February 2018

Smart Goals, Achieve ,Success, Financial Goals

How to Achieve Goals? The SMART Way…..

How to Achieve Goals? The SMART Way…..

SMART ways to realize goals … (applicable to Life / Health / Financial Planning/ Career …. )

Specific Goals, Success Mantra

S – Specific. Be Specific . For example, “I want to lose weight.” Or “I want to become rich” This is wishful thinking. It becomes a goal when I pin myself down to “I will lose 10 pounds in 90 days.” Or “I will save 3 lacs in 1 yr” etc

Peter Drucker Quotes, What gets Measured Gets managed.

 

M – Must be measurable. Something which cannot b measured cannot be achieved. Measurement is a way of monitoring our progress. For example, 10 pounds/90 days  or achieving a savings of say 3 lacs/ year etc….is measurement.

Be Flexible, Adjustable for Successful achievement of goals

 

A – Must be adjustable.  Goals are not meant to be win or lose situations. Goals are just goals. You can achieve them 100%, or 85% or 50%. You can achieve them early, or late, or if things go exactly according to plan – right on time. …. Often people make the mistake of setting goals that are too rigid, where any unforeseen event can throw the goal off course and destroy the goal achiever’s motivation to keep going …..

Be adjustable and realign , refocus and start afresh when thrown off track … so make your goals adjustable according to new situations as all goals should be …Smart Goals, Achieve ,Success, Financial Goals

• R – Realistic. We’re an achieving generation. We want to take care of our families, to do well in our careers, get Best education for children ,to have fun, to travel. We want to buy the new car, wear the new watch, check out the new holiday destination…..etc…. Have your priorities, know your capabilities, and stretch yourself a little bit to get that extra edge.

But remember, don’t take risks where you can’t afford to, and don’t set yourself up for disappointment. Don’t wet unrealistic goals e.g.:: Losing  30 pounds in 30 days is being unrealistic. Doubling investments every year….. is unrealisticTime Quotes, Success Mantra , Achieving Goals

• T – Time-bound. There should be a starting date and a finishing date. With no time frame, there’s no sense of urgency, or yardstick to measure your progress.

Your goal must be achievable. You must have the mental and physical capacity to reach the goal. It would, however, be important for your goal to cause you to stretch beyond normal self-imposed limits. You will find a goal that causes you to stretch and grow will be the goal that gives you the most satisfaction. Don’t be afraid to challenge yourself to go beyond old limits! Let Success be yours….

financial planning, financial freedom, Bad investment products to avoid, Retirement Planning, Child Plans

 

January 2017

The Golden Rules for Investing

10 rules for investing, Risk, Compounding, SIP, Greed, Fear, Taxes, Tips, Value Investing, Personal Finance, Financial Planning

The Golden Rules of Investing are essentially a common sensical approach which largely comes down to the emotional aspects such as Discipline, Patience, Greed & Fear. 

Remember these 10 golden rules of Investing.

1. Risk is inevitable – What is Risk?  Understanding Risk is the first part and then learning to Manage it. 
2. Start early – Benefit from compounding. Einstein has acknowledged Compounding as the 8th wonder of the world.
3. Have realistic expectations – Greed is bad. How much is too much. You never know what is enough, until you know what is more than enough.
4. Invest regularly – Not even God can time the markets. Timing/Forecasting the markets is an illusion.
5. Stay Invested – Be a marathon runner. Markets tests patience and rewards conviction.
6. Don’t churn your investments – It only increases costs. If you like gambling, go to a casino. For serious investing, stay put.
7. Spread your corpus – Each investment class is important. Don’t put all your eggs in one basket. 
8. Sell your losers – Hope doesn’t make money, Wisdom does. We are biased against actions that lead to regret. People attach too much weight to gains and losses rather than wealth. 
9. Hot tips usually burn your investments – Avoid them. Remember the reverse of TIP is PIT. So a tip usually dumps you in a PIT almost always. 
10. Taxes are important – But not at the cost of a bad investment. Only Death and Taxes are certain, true ~ But don’t make bad investments just to save tax. Don’t be Penny Wise Pound Foolish.

Happy Investing

June 2016

Types of Investors – What type are you?

Types of Investors , Conservative, Aggressive, Risk taker, Risk Profiling, Risk Averse, Savers, Specialists, Speculators

I came across this good article at http://www.threetypes.com/philosophy/investor-types.shtml and wanted to share. It essentially discusses the various types of Investors viz : Savers, Speculators and Specialists and then goes on to explain how becoming a Specialist, is something which generates immense wealth over lesser periods of time , but which also requires tremendous efforts on the part of the investor.

Go ahead and decide which type of investor you are and then invest accordingly. Enjoy Investing…..

Savers

Savers are those people who spend the majority of their life slowly growing their “nest egg” in order to ensure a comfortable retirement. Savers explicitly choose not to focus their time on investing or investment strategy; they either entrust others to dictate their investments (money managers or financial planners) or they simply diversify their investments across a number of different asset classes (they create “a diversified portfolio”). For those who create a diversified portfolio, their primary investing strategy is to hedge each of their investments with other “non-correlated” investments, and ultimately generate a consistent annual return in the range of 3-8% (after adjusting for inflation). Those who entrust their money to professional money managers generally get the same level of diversification, and the same 3-8% returns (minus the management fees).

Savers seek low-risk growth of their capital, and in return, are willing to accept a relatively low rate of return. While there is certainly nothing wrong with striving for consistent returns, what the Saver is doing is really no different than putting their money in a Certificate of Deposit, albeit with slightly higher returns. The bulk of Savers are investing for long-term financial security and retirement. They start saving in their 20’s and 30’s by putting money in 401(k) accounts, mutual funds, and other diversified investments, and in 30 or 40 years, they have enough to retire on.

Savers rely in a single force to grow their capital: time. Because their rate of return is generally consistent, a Saver’s primary mechanism to achieve wealth is to invest and wait. In fact, Savers often use The Rule of 72 to calculate long-term investment growth and plan their retirement. While passive investing is an almost surefire path to a comfortable retirement, it also generally means 30-50 years of work to get to that point.

Speculators

Unlike Savers, Speculators choose to take control of their investments, and not rely solely on “time” to get to the point of financial independence. Speculators are happy to forgo the relatively low returns of a diversified portfolio in order to try to achieve the much higher returns of targeted investments. Instead of just spreading their money across stock funds, bonds, real estate funds, and a variety of other asset categories, Speculators are always looking for an investing edge. Perhaps they get a hot stock tip and try to cash in on the next Google. Or perhaps they hear about all the real estate investors who have made a bundle flipping houses, so they go out and buy the first run-down house they see.

Speculators recognize that they can have higher returns than Savers, and are willing to do or try anything to get those returns. They’re not scared to throw some money in an Options account and try their hand at derivatives trading; or run out and buy a bunch of inventory from a wholesaler they know and open up an eBay selling account. Speculators are always looking for the next great investment; for them, it’s all about being in the right place at the right time, and taking a chance on getting rich. If today’s investment doesn’t work out, there will always be another one tomorrow. (more…)