This Diwali, you must get rid of these 5 bad investment habits
Diwali is a festival of lights and known for puja of Goddess Lakshmi. There is a belief that Diwali also marks an auspicious time to invest your money.
Diwali is a festival of lights and known for puja of Goddess Lakshmi. There is a belief that Diwali also marks an auspicious time to invest your money. People invest their money into several asset classes, in order to multiply their funds and there is no better day than Diwali to do so. As Diwali is considered as a beginning of new financial year, as per the Hindu calendar year, we can adopt few investment habits and must get rid of a few bad ones to accumulate prosperity and financial fitness in long term. From spending on unnecessary items to making bad investments, here are 5 bad investment habits you should get rid of this Diwali:-
1. Unnecessary expenses
We cannot save every single penny out of our income but we should definitely avoid making unwanted expenses. Sometimes we carelessly spend on the things that could have been avoided. Adopting a good lifestyle is fine but it becomes problematic, once you start spending every single penny to maintain that lifestyle. If you can't afford a sedan, don't buy one. If you can manage into a 2BHK apartment, why to go for a big one? Spending right saves you huge amount of funds in long term and reinvested smartly, it can make you rich in no time.
2. Making investments without knowledge
Investments are like plants. The more you care, the more they grow and more they grow, more they return. Warren Buffett also says that one should never put his/her hard-earned money in the investments they do not understand. It is like buying something with no use. If you understand real estate, go for it, but if you are bad with negotiations, you will end up losing your money. Therefore prior to any investment, make sure to collect enough understanding on the option and return prospects from the investment you are eyeing.
3. No budgeting
A smart investor is not the one, who invests smartly. In-fact, the one who invests and spends smartly is a winner here. No matter, how small or big your expenses are, you should always keep a record of them. You should have a monthly budget that states expenses in different categories. Having a planned budget lets you save a lot of money. You can calculate if you are going surplus or deficit, with the help of a spending calendar. There are lot of mobile apps that helps in making financial budgets.
4. No financial planning
Financial planning is not just investing money or spending less, it is much more. One should have a plan ready for future financial requirements. It could be a marriage of your child, higher education, medical cover of parents, buying a house or business investments. You should know about your tax structure, interest income, rental income or other sources. One should always have a financial plan for future ready, which can be modified annually.
5. Not investing in other important things
It is great to have a financial portfolio that has stocks, mutual funds, real estate or various other assets. However, as we all know that human life is subject to life risks, one should always invest in other important things like health insurances, life covers, medical emergency funds and contingency funds. Imagine, what would your stock do, if you are not alive. So, it is extremely important to have an insurance of your health and life as it can protect your family in case of an emergency in life.
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