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Monday, 15 April 2013

Worth the risk (of reading..)


“Twenty years from now, you will be more disappointed by the things you didn’t do, then by the things you did do. So throw off the bowlines! Sail away from the safe harbor. Catch the trade winds in your sails. Explore, dream and discover.”

                                                                                              -- Mark Twain

"A ship in harbor is safe – but that is not what ships are for."

                                                                                               --John A. Shedd

 
“The person who risks nothing, does nothing, has nothing, is nothing and becomes nothing. He may avoid suffering and sorrow but he simply cannot learn and feel and change and grow and love and live”

                                                                                              --Leo. F. Buscaglia

 
“Often the difference between a successful person and a failure is not one has better abilities or ideas, but the courage that one has to bet on one’s ideas, to take a calculated risk and to act”

                                                                                          --Andrew Malraux (French Statesmen 1901-1976)

 
"First you jump off the cliff and you build wings on the way down."

                                                                                                --Ray Bradbury

 
Meaningful as they are supposed to be, ‘Quotes’ have the ability to underline or highlight our own thought process. Probably that is the reason they appeal to us.

 
Majority people have negative thoughts and feelings about taking risks. Risk is considered a synonym with danger, uncertainty, gambling, speculation and the fear of loss. As a result, many people avoid risks. There is a thin line between avoiding risks and thinking that risks have been managed; AND actually managing risk proactively. Managing risk towards relationships, health, career and finance has the ability to keep life flowing easily.

Monday, 1 April 2013

Resolutions for New Financial Year 2013-14


It’s the beginning of a new Financial Year 2013-14. Beginning of a new Financial Year always coincides with the Fool’s Day. It reminds me of the idiom ‘Penny wise and Pound foolish’ which means stingy about small expenditures and extravagant with large ones. It is certainly 'Pound foolish' to neglect or procrastinate about important financial decisions. It’s time to introspect and think over some ‘New Financial Year Resolutions’.

Resolutions acknowledge the weakness in our lives and make a commitment to improve them over the next year. The resolutions mentioned below may lead you to a financially stress free life by the financial year end.


·         Invest for Retirement

Your life stage or age bracket does not matter here. If you have been already doing it, review it. If you have been thinking about it, do it. If you think you are too young to think about it, remember to start now to ease the things later in your life. Most importantly do not fall for the Pension products available currently because they have the word Pension tagged to them. Make your own Plan with element of equity in it as per your risk taking capacity.
 
·         Pay off the expensive loans

If you have a Credit Card outstanding, Personal Loan or any other expensive loan to be repaid, make it a point to repay them soon. They are eating your hard earned money with high interest rates. If you have the repayment capacity, pay off the Car Loan as well because loan against a depreciating asset is certainly expensive.
 
·         Subscribe for Insurance products only to protect against risk

Don’t be irritated by mere mention of the word ‘Insurance’.  The most marketed financial product should only be viewed as a ‘risk protection’ custodian.  Subscribe for these four type of Insurance Plans with a motive to protect your dependents and your goals—Term Life Insurance, Health Insurance, Personal Accident & Disability Insurance and Householder’s Comprehensive Insurance.  Treat the premium on these Insurance plans as expense. Believe it or not, for a young family the cost of all the essential four insurance plans is only approx. Rs. 1500 per month. It has the power to protect you against major financial calamities.

·         Embrace Financial Literacy

You are the best manager to manage your own money. However, ignorance is not bliss here. If you really want to effectively manage your own money then update your knowledge on Personal Finance and products. Aim to get the basic knowledge as it helps in taking informed decisions. Understand the impact of inflation and starting to invest early. Spread awareness amongst your family members and community.

·         Build a contingency reserve

Amount equivalent to six months of your expenses should be available as contingency reserve. This can be held in the form of balance in Savings account, liquid funds or fixed deposits linked with savings account.  This reserve is to be utilized only in case of emergency like loss of employment, family contingency etc.

·         Save regularly in good financial products

There is no alternative to this one. Understand the products, know your risk capacity, choose carefully and invest regularly.

·         Explore Additional income sources

Even a small sum of money from an additional source can add up as a good support to your regular income. Try and figure out if your hobby or weekend classes or rent can earn you some income.

·         Prepare a Life Plan

Life Planning-which deals with your goals and priorities, Life Style Planning- which deals with quality of life you want to live and Financial Planning- which deals with money go hand in hand. Jotting them down on paper and building a Plan is a sure step to get closer to attaining goals. By keeping all these things in mind the goals are likely to be forgotten and compromised.

Wishing you a Happy and Prosperous New Financial Year 2013-14 !!!!!!