On my recent journey in metro train, wrote this blog to my destination.
Riding in metro is similar to managing effective personal Finance.
From boarding till end, it gives us lot of lessons to learn. Next time, when you are traveling in metro , you will take note of all the points that are mentioned below and smile 🙂
Desired Destination: We board Metro train as per our Desired destination. We buy the token/ ticket or use our smart card for defining our destination. Your journey is not complete if you do not reach your destined station.
Similarly, in Financial planning, we should decide upon our goals, the investment vehicle should be decided according to our goals and not vice versa. What most of us do is Buy a Financial product and then earmark to a goal, which may or may not help reach the destination. Wrong initial planning will lead to underachievement of goals and dissatisfaction.
Buying decision: Our Buying decisions are usually influenced by lot of factors and most of the times it is personal than logical/ practical . For metro travel, we have an option to buy token or smart card. Smart card helps us save 10% on each trip and also saves us from the hassles of standing in queue of token vending machine. Those who are frequent travelers would want to buy smart card for obvious reasons and this who travel in like once in a year may not buy the smart card. The benefits of smart card will not be much in the short term but if your travel cost on daily basis is 60 , and if you use it 20 days a month, so in an year you would save Rs.1440.
Similarly, once we decide upon our goals and we know various investment options, we narrow down on options according to our comfort, convenience, understanding and risk appetite.
For example: Two friends with same family size, same goals ( kids’s education, retirement etc) , same salaries and almost same lifestyle will not necessarily go for same investment options. One may be risk averse and would get solace by investing in fixed instruments while the other would want to earn higher returns by investing in higher risk products. Initial buying decision makes a lot of difference in the long run.
The journey: The journey may be smooth or may not be. There can be many obstacles like you not getting the seat 😀 , unexpected Halts in the journey, Noisy aunties/ college students on the train , suffocation due to AC not working but despite all odds, you only think of your destined station and finally you reach there. These were all the external factors which you could not do anything about. There can be some internal factors interrupting your journey, taking care of your belongings to avoid any loss, Not putting your hand on the glass door , minding the gap in between the train and station while getting on or off. You can help yourself by taking these conscious steps.
Similarly, the journey to reach your financial goal may/may not be smooth. We expect the best but also at the same time be prepared for the worst. We do our own due diligence when entering into a financial product, we should buy insurance to cover uncertainties like health issues or Death, we stick to our goal irrespective of external noise/ market fluctuations.
Final Destination: Finally, you reach where you were destined to. The sense of accomplishment is there.
Similarly, there comes a day when you reach where you were destined to in your Financial life. When you look back and connect the dots, you feel sense of achievement and accomplishment. All this was possible because you were disciplined , patient , persistent and dedicated. You did not deviate from the goal despite all odds helped you reach where you are today.
So, the journey becomes exciting once your vision to reach destination is defined.
Wishing a very Happy Financial life to you 🙂
About the author: Gurleen Kaur Tikku is a Financial Consultant and devotes her time to her company www.hareepatti.com. She has done her Bachelors in Finance and Investment Analysis(BFIA) from College of Business Studies (CBS, Delhi) and MBA from IMT, Ghaziabad . She can be contacted at email@example.com .
images have been sourced from google.com