We work hard, earn, save, and hope for a stable life. The first step in the direction towards a stable life is taking action, especially when it comes to money.
Here are 7 action verbs, starting with the letter ‘A’, which should become part of your money dictionary if you want to do a better job at managing your money.
#1. Accelerate your earnings: It is not easy to get a raise in your CTC unless you have shown consistent and remarkable performance month on month.
The annual appraisal amount is always a mystery. You must, therefore, try to get some additional income, and accelerate your earnings by way of making investments which yield inflation beating returns.
#2. Acquire assets that give good returns: Once you decide to invest, you have to ensure that you invest in assets that provide returns which match your goals. Do your research and ensure that you get optimum bang for your buck.
#3. Anticipate future expenses: You need to keep in mind your fun plans too! A weekend getaway or a dinner at a fancy restaurant in town must be factored in at the beginning of the month, so that you can plan your savings accordingly.
#4. Allocate funds across instruments: Do not put all your eggs in one basket. That simply means, that smartly allocate your savings between long term and short term instruments.
Instruments such as debt funds would cater to your short term requirements and expenses, while equity can take care of your long-term objectives.
#5. Allow your wealth to mature over time: Markets can be volatile and unpredictable. You can never foresee the performance of certain investments, such as equity. Be prepared for a few ups and downs when you are venturing into riskier instruments.
Do not lose patience; hold your instruments for the suggested holding period. For instance, you need to give equity at least 7 years if you want to see good returns.
#6. Achieve your goals: Before investing, have a goal in mind. What does your investment aim to achieve? If you were saving up for a trip, for 2 years, you must withdraw the amount after that tenure.
Make sure you make your dreams come true after you have invested not just your hard saved money, but your patience and hope too.
#7. Assess your weaknesses and strengths when it comes to managing money: Last but not the least, you should assess your personality before investing. Do your homework and ensure that you remain steady even if the markets act like a roller coaster.
Know your emotional make-up. If you have lower self-control, you are more likely to panic and sell during temporary downs in the markets.