If you can’t fly, then run, if you can’t run, then walk, if you can’t walk, then crawl, but by all means keep moving.– Martin Luther King Jr.
Life is a journey and so is our financial life. In order to ensure a good financial life it is imperative that we choose vehicles which suit us, which we are comfortable with.
Every individual has different risks, liabilities, dreams so their goals will be different and accordingly they would choose the financial plan for themselves. One of the most important part of financial plan is the type of investment we choose. Let’s explore this by the following example.
You might use a flight for travelling from Mumbai to Bangalore, but if you are travelling to Pune then you will use either a cab or Bus. Even though you might like flights you don’t use them for short distances or vice a versa you won’t use buses for long distances.
So, based on your destination (read goal) you choose the mode of transport (read investment type or vehicle) then why not follow similar process for your financial planning. Your goal should decide which investment vehicle is to be used – Equity, debt, gold, real estate.
You shouldn’t get obsessed with your investment (vehicle), the moment you reach your goal you should get out of them. It’s like a train it will keep moving, you need to get down at your station.
Investing is a lot more than financial analysis, it has a lot to do with the behavioral part as well. If you cannot control your behavior (reactions) then no matter which vehicle you choose it would be difficult to reach your destination.
When you travel to new destinations, you might research on all the available information and plan your journey or you might consult a travel agent. Similarly, in your investment journey you need to put in a good amount of time in researching. And if you are not skilled enough to do this then you should hire a good financial planner.
“The rich invest in time and the poor invest in money” - Warren Buffet.
This is difficult to follow, I mean exiting the investment when you are in profit. It would be helpful if you could share some views on how to do it.
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