How to get rich: These footballing lessons on financial planning will make you wealthy
While it is all very well to watch the multiple thrills-per-second action, the same kind of focus should also be applied elsewhere - on financial planning. It can decide the fate of your future, so it is much more critical.
Soccer World Cup 2018 is gradually coming to an end. But not before a lot of action has happened on the pitch. It has left many losers and some winners and ultimately, only one team will be crowned the champions! So, far so good. While it is all very well to watch the multiple thrills-per-second action, the same kind of focus should also be applied elsewhere - on financial planning. It can decide the fate of your future, so it is much more critical. Far from that eventuality, people in fact often complain of paucity of time when it comes to financial planning. If spending time on your passion is important, so is your future. So, here is an attempt to catch football fans' attention regarding financial planning:
Forwards are the players who remain upfront, aggressively playing and scoring goals for the team. They might be the most important part of the team in football, but in the world of finance that is not the case! Don't be a 'Forward' in financial planning. Do not try to make money aggressively in the stock market. Prudent approach would be to go for proper asset allocation i.e. investing proportionately in equity and debt, while keeping some cash handy.
Midfielders are generally positioned on the field between their team's defenders and forwards. They can attack and defend too and at the same time they also try to control various aspects of the game to favour their team. In financial planning, being a mid-fielder means investing in some balanced funds. These funds are the combination of midcap and largecap stocks with some proportion of debt investment. Balanced funds keep the balance between equity and debt asset classes steady.
A defender's primary role is to prevent the opposing team from scoring goals. They are the 'protectors'. In the world of finance, defenders are such financial instruments that manage your risks, protecting you from unforeseen events. These financial instruments include life insurance, term plans, mediclaim etc. Investing in gold and fixed income plans also fall under this category.
Fouls and misconduct
While in football, referee penalises the player who interferes with the active play of the game, fouls in stock market may cost you dearly. The best way to invest in stock market is to do it via systemic investment plan (SIP). One should never try to time the market. It is close to impossible for even most assiduous investors to buy at low points and sell at high point. Therefore, one should always invest in a periodic manner via SIPs lest a sudden foul (crash), erodes your money by a good margin.
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The most striking similarity between football and financial planning is goal-oriented approach to play and invest, respectively. As in football, players keep looking for striking goals, investors must also aim at meeting their financial goals when they plan their finances to meet their current and future needs.
If you play the game right, you will end up rich - a winner!