Investing without a plan is like driving directionless on an unknown road. A map indicates your destination and the best path. Without one, you risk taking a winding route. Similarly, to make your investments work for you, you must know why you are investing. Your financial plan is a map for your investments.
Want your idea to succeed? Practice the proven path – plan properly. Planning is developing your idea from conception to production.
Getting Started
Follow a “Think-Plan-Do” approach. Let’s start by applying this approach to your investments. Thinking is becoming conscious of your goals. Planning is establishing a step-by-step process to translate thoughts into actions. Only executed plans are successful. Doing is charged with action. Then you come back to thinking. Measure your actions, review your progress, and stay on track.
Investing With & Without A Plan
Tushar and his close friend Chirag were discussing college admissions for the coming year. Both their children were heading off to college. Tushar started seriously saving in the last five years. He didn’t give much thought to his goals. He had a few mutual funds and stocks to his name. Recent economic trends eroded his investments. To fulfil his son’s university dreams, he resorted to an education loan.
On the other hand, Chirag chose professional help. He had a financial plan. He did his research. He knew how much his daughter’s education would cost. He knew when he’d have to pay for it. And he consciously saved every year towards his target. His financial planners even considered the rise in student admissions and college fees. They encouraged Chirag to maintain a buffer to achieve his goals. This safety net safeguarded against fluctuations. He systematically shifted investments from equity into debt in the last year. For Chirag, planning removed the hurdles to his goal.
Smarten money. Don’t get caught off-guard. Prepare for contingencies with a plan. Be proactive and get your financial plan today!