As I begin to write this, the cricket world cup 2015 final is scheduled to begin in an hour. World cups occur once in four years which can be a mini lifetime! Each cricket and football world cup, I ask myself, where was I the last time it was played? Where will I be the next time it will be played?
‘Where’ here refers to my life as a whole and not just my fiscal health. If I feel happy during a world cup, I am almost certain that the law of averages will strike and that I will be sad during the next event. If I feel sad during a world cup, I am also most certain that the law of averages will fail and that I will continue to remain sad come the next event.
Such is the level of my optimism as regular readers will be aware. While I cannot comment personal definitions of happy and sad, this post is to urge you (and me) to evaluate your current fiscal health, compare it to what it was four years ago when Dhoni’s men lifted the trophy, list a set of milestones that need to crossed before the 2019 Cricket world cup.
For me, the period between 2011 and 2015 world cups have been a period of consolidation. I had term insurance, health insurance and emergency funds in place just after the 2007 Cricket world cup. So it was a matter of keeping my head down, ignoring the noise and invest with discipline. So far, so good.
If you are just beginning to take control of your finances here are list of milestone suggestions for you to work with and adapt as per your personal situation:Steps for Financial fort
Steps for financial fortification (life, health, accident insurances + emergency fund) are emergency actions and are independent of when World cups arrive.
- If you are not investing as much as you should for your long-term financial goals (use a financial plan creator to find out) then try to reduce this gap as much as possible by 2019.
- If you are servicing a home loan EMI, think twice about pre-closing it asap and achieving the above.
- Learning to balance investments with EMI is an important step in of itself.
- Many tend to believe that investment deprive them of enjoying ‘today’. Learning to balance fun with investment and feeling comfortable about it can be important milestone. This is something I have managed to do well since the last WC.
- Aim to increase your net worth as much as possible. Purchasing power grows with time but so should your net worth. Your net worth target can be equal to term life cover. If your net worth exceeds your life cover, you don’t need to worry if the claim on your term cover will be honored or not. I managed to achieve this milestone before WC 2015. Note for those who are planning to buy a term cover: Do not work think the problem. Get a policy from any insurer you like, be honest while applying and aim to increase your net worth. A few years later, the importance of your life insurance policy will diminish and you can rest easy.
- Aim for an investment-only four years. No redemption from your investments except for serious unexpected expenses.
- If you are someone who is lazy, irregular and happy go lucky, resolve to MDBSC* until the next World cup. If you can pull that off, it would be a great achievement.
- Aim to track your investing schedule.
- Aim to track your net portfolio return and learn how to calmly review your portfolio
That is as far as my thinking takes me. Let us hope our fiscal health improves and stay fit over the next four years. If you are aiming for financial freedom, here is hoping you achieve it before the next world cup final.
Here is hoping New Zealand wins this one!
Here is hoping Martin Crowe lives to see this years IPL final (for a start).