Am I doing enough? Isn't this all too complicated? Should you seek help? Will it be too expensive? Finances are in a mess. But I don't have time to get it right. These are the annoyances of many of us who are so busy with the business of life and work tasks that we simply don't have time for our money. Research has shown that overthinking or talking about a job can make it seem bigger, more complex, and difficult to accomplish. Or indirectly trick the brain into believing the task has been accomplished. Remember that those who want to lose weight talk a lot about diets but get little. They lose the battle without starting to fight because they give them a lot of room to think. So here are some tips to keep the process simple and a checklist to see what you're doing.
First, are you earning enough? Without a fair answer to this question, you cannot control your money. Spending habits and unexpected situations determine how our money is used. Most of us believe that we are trapped by these limitations. The truth may be that we are not earning enough. You should have some balances in the bank before your next paycheck; And you don't have to worry about small, unplanned expenses. Check if you are earning enough. Find ways to do a better job.
Second, do you save regularly? Is there an amount of money that you can confidently set aside and not use? Can you do this every month? Saving is a sign that you are earning enough and not spending more than your potential. Without reasonable savings, your investment journey will not progress much. Even if it's a small amount, you should be able to routinely set it aside.
Third, are you debt-free? For many, this may not be an important goal. The guarantee provided by consistent and adequate income makes debt service easy. The easy availability of retail credit means that many people update their homes, cars, and families frequently and with great ease. At some point in your financial life, you must cross that bridge were using money that is not yours seems superfluous. Credit is spending tomorrow's money today. At one level, it is a desperate business to offer the benefits of a large sum of money that the bank can trust. You must overcome this need at some point in your financial life.
Fourth, do you have assets outside of your home? Many people focus on buying real estate as their first major financial goal. Even if an asset is hoarding and expensive, home security is important to many. But this "investment" should not absorb all the other investments you may have. You can have your own PF; Certain tax savings investments; Some stocks and funds. And some deposits. These other assets should grow to be at least equal to your property. Don't just retire with the home and a minimal amount of other investments.
Fifth, do you have equity assets? This is an important question and many stocks associated with stock trading. Without growth and capital appreciation, your investment will underperform. Especially in the long term. Don't compromise your estate due to unknown concerns about losing money. Rely on the benefits of asset allocation and invest a portion of them in an index, diversified fund, or a set of blue-chip stock.
Sixth, if you have equity assets, have you overlooked the need to negotiate and overcome the problem? Stock trading is a great pastime for excitement; It is not a strategy for financial well-being and wealth. You can put some of your money into gambling and enjoy an adrenaline rush of bets, wins, and losses. But don't let him invest your money in the temptation of quick money. Make it a controlled matter that sometimes generates a part that you can use to enjoy a vacation; And sometimes, hopefully, you erase the principal without seriously damaging your money.
Seventh, if you are a passive investment or fund investing type, do you have a lot? If your stock holdings have more than 50 names or you have more than 20 funds, it is very likely that your portfolio will perform similar to that of the index. Unless you have a significant portion of winning stocks, disproportionate to other positions, this index-like performance is the mathematical result. If you have shares of your employer and you are ready, you have a winner. Don't add stocks and funds to your portfolio without thinking about it, thinking that it will work better. You will tend to average.
Eighth, do you have investments that don't work? The portfolio review appears to be a difficult task. Many investors shy away from the annual practice of looking at their properties to see what is working well and what is not. In doing so, many laments the investment opportunities they may have missed. This is a useless practice. There will always be something that works better than what you own, and there is no way you can predict the best and take advantage of it early on. But what you control is what you have. If you get rid of lost holdings, your wallet will do just fine. No matter how difficult it is, develop the discipline to sell what you don't.
Ninth, do you actively practice giving? At a time when one has achieved a sense of security and satisfaction with their finances, many find that they may have more than they can use. Or you may feel the pain of social responsibility. Or consider the moral requirement to support disadvantaged relatives or service providers. Are you generous in spreading your money? Do you allow bonuses for your family's employees? Do you act magnanimously in a crisis? Make it your habit, if you reach the stage of financial comfort. It is a sign that you are not letting money control your life, but that you can give it up.
It's okay if you haven't formally sat down with your wallet and made important decisions about it. The only discipline is to use your money without leaving it idle. Consider your financial life in smaller, easier-to-handle tasks. Don't put them all together to imagine fixing everything you do. Slow and steady steps to simplify what you have will work for most of us. Keep it simple.
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