To me, personal finance is nothing more than common sense. Commonsense is simply nothing but mathematics expressed in a spoken language.
Before I started the blog, I knew nothing about investor behaviour and aspects of behavioural finance. It was irrelevant to me. Now I find myself learning about the different ways in which people handle their finances and how different ‘attitude towards money’ can be.
Please find below some of my findings listed in the form of resolutions.
- I will list my financial goals first, plan a strategy and then worry about investments
- I will recognise the returns I need for my financial goals and invest accordingly. I will not madly chase after returns.
- I will ensure all my tax-planning is perfectly aligned with my goals. I do not care whether it is April or November; my tax-planning depends only on my goals, and I, invest for my goals all through the year.
- I will not search for a ‘good pension plan’ or a ‘good child plan’, for I recognise they do not exist.
- I will not worry about my mutual fund holdings each time the market slumps.
- I will learn to analyse investments on my own …. using tools available at freefincal 😉
- I will not be swayed by posts/comments/news that predicts market movements, suggests stocks, gold, real estate, bonds, anything. I don’t give a rat’s fart.
- I will not ask for an opinion about an investment option and wait for someone to agree with me!
- I will not hold a lump sum in my SB account and wait for the next set of bonds or the next big investment opportunity.
- I will recognise that I can die anytime (even before I finish reading this post! Perhaps because of it!) and take a term insurance policy and write a will (thanks to Bharat Shah for pointing this out).
- I will recognise that there are a million diseases that can make me sick anytime. If I rely only on my company health benefits and wait until I retire to get my own policy, I may not be able to get one. So, off I go to get one for all my dependents right now!
- I will recognise the importance of inflation and stop obsessing about ‘regular income’.
- I resolve to streamline my personal financial life as quickly as possible so that I don’t have to read blogs, follow FB groups on money, watch TV shows, etc. anymore.
- I will understand what conflict of interest means and recognise how deep-rooted this is in the financial services. This will help me with resolution no. 13.
- In any case, I resolve to stop reading the one written by a pretentious idiot named ‘pattu’.
To me, that is the best way of becoming financial literate:
- Imbibe the basis, asap
- Implement the basis, asap
- Ignore the bull shit, asap
I do hope you agree with this list. Would you like to add (or subtract) to this list?