Have you seeen the opening ceremony to the Commonwealth Games (CWG) ? Owesome right..?
Is that created over one day ? definitely not.
Its the result of months and years of planning, implementing and achieving the goal on time. Here let us analyze how CWG related to personal finance.
1. Start early: The CWG were awarded to Delhi in 2003, but only by 2008 the authorities started some meaningful activities. It is this delay that cause the nation to embarrassment. So this is the best lesson that all of us should learn to achieve our financial goals - Start Early
Whatever may be our financial situation, we should start planning and saving to achieve our goals. Time is more valuable than the amount you may have invest. Compounding may work only if we stay invested for more duration.
2. Accountability: For the CWG, it seems like there was no final authority. There every one department pass the responsibility to some one else and create all the mess. No need to smile at this, since this can happen to anyone at home. Son may think why should i, let father deal with all the grocery purchase, bill payments etc. Husband may think that his wife may deal with kids, tuition, parents meeting, school fees etc. and wife may think investment, EMI, insurance premium, setting financial goals etc are only husbands duties. All these mess can create more issue similar to what happened in CWG.
In our family we may find these jobs to be boring, some may even dislike taking about finance with wife or parents or kids. But this can only lead to lack of proper insurance, bad credit scores and chaos. So its always better than all the matters need to be discussed in our family and some one should take responsibility to monitor and ensure all these matters to executed to completion
3. Review regularly:
Did you feel that the CWG Committee could have done a better job if they review regularly and asses the progress honestly. Don't just blame the CWG committee, lets ask a question to ourself, When was the last time i reviewed my investments and goals? if we want to achieve our goals a portfolio review is a must.
Now a days we have various means for portfolio management. Its worth entering all your portfolios into an online monitoring website and periodically check the health status of your portfolios atleast twice in a year. Also make sure that you are maintaining the correct proportion of Equity : Debt investment.
4. Budget:
Did you know how much is the expenditure of CWG - Rs 70,000 crores. The worst part is that its 114 times the actual estimate a clear example for the lack of budgeting. Budgeting plays a significant role in every ones life.
Buying a big apartment, daughters wedding or buying a car, we should have a clear idea about what should be the total expenditure and is that really within my reach and capacity. We need to ask ourself that do i have the capacity to buy an apartment at this stage of my life. Do i have systematic investment plans going to meet my daughters higher education or is all my earning are being spend on movies, dress, restaurant, night clubs etc. We should learn to live within our limits and don't go into a situation of stretching our budgets like the Delhi CWG.
5. Reputation:
Even conducting a spectacular opening ceremony, we have seen some of the organizers being jeered while making their ceremonial speech. This can happen to us too. If we don't plan our expenses, or do proper budgeting we will actually get mocked by our relatives and neighbours. Also if have a loan from a bank and don't pay back the money, but go on spending on other liabilities, our reputation in the form of credit score will be lost. Finally every one will mock on us and can leads to eviction by the banks.
So, don't run behind short-term gains or show off at the expense of losing our long-term reputation and goals. Reputations or goals , once broken are very hard to recover.
2. Accountability: For the CWG, it seems like there was no final authority. There every one department pass the responsibility to some one else and create all the mess. No need to smile at this, since this can happen to anyone at home. Son may think why should i, let father deal with all the grocery purchase, bill payments etc. Husband may think that his wife may deal with kids, tuition, parents meeting, school fees etc. and wife may think investment, EMI, insurance premium, setting financial goals etc are only husbands duties. All these mess can create more issue similar to what happened in CWG.
In our family we may find these jobs to be boring, some may even dislike taking about finance with wife or parents or kids. But this can only lead to lack of proper insurance, bad credit scores and chaos. So its always better than all the matters need to be discussed in our family and some one should take responsibility to monitor and ensure all these matters to executed to completion
3. Review regularly:
Did you feel that the CWG Committee could have done a better job if they review regularly and asses the progress honestly. Don't just blame the CWG committee, lets ask a question to ourself, When was the last time i reviewed my investments and goals? if we want to achieve our goals a portfolio review is a must.
Now a days we have various means for portfolio management. Its worth entering all your portfolios into an online monitoring website and periodically check the health status of your portfolios atleast twice in a year. Also make sure that you are maintaining the correct proportion of Equity : Debt investment.
4. Budget:
Did you know how much is the expenditure of CWG - Rs 70,000 crores. The worst part is that its 114 times the actual estimate a clear example for the lack of budgeting. Budgeting plays a significant role in every ones life.
Buying a big apartment, daughters wedding or buying a car, we should have a clear idea about what should be the total expenditure and is that really within my reach and capacity. We need to ask ourself that do i have the capacity to buy an apartment at this stage of my life. Do i have systematic investment plans going to meet my daughters higher education or is all my earning are being spend on movies, dress, restaurant, night clubs etc. We should learn to live within our limits and don't go into a situation of stretching our budgets like the Delhi CWG.
5. Reputation:
Even conducting a spectacular opening ceremony, we have seen some of the organizers being jeered while making their ceremonial speech. This can happen to us too. If we don't plan our expenses, or do proper budgeting we will actually get mocked by our relatives and neighbours. Also if have a loan from a bank and don't pay back the money, but go on spending on other liabilities, our reputation in the form of credit score will be lost. Finally every one will mock on us and can leads to eviction by the banks.
So, don't run behind short-term gains or show off at the expense of losing our long-term reputation and goals. Reputations or goals , once broken are very hard to recover.
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