The festive season has commenced, and the festival of lights Diwali is knocking on the doors. Celebrated with great pomp and show across the length and breadth of the country, the festival is associated with financial prosperity. No wonder, Diwali holds key financial lessons imbibing which can hold you in good stead in the long run. Here are five such lessons to learn from it.
Diwali planning starts months before the actual festival. Right from decorations to gifts to rituals, every aspect is planned to avoid hiccups in the last moment. The same goes for investments as well. You need to plan in advance to ensure you reach your goal with ease.
For example, if you wish to build a corpus for your retirement, ideally planning must start from the day you start earning. Similarly, to accumulate funds for your child’s higher education or making a down payment for your dream house, it’s essential to plan early and make investments accordingly.
The goals for Diwali are set beforehand and arrangements are made accordingly. Be it buying new clothes or lighting up homes with diyas and lights, the objectives are clear. Similarly, it’s vital to set a financial goal and work towards it with discipline and patience.
Setting up a goal is the first step towards investments. A goal gives direction to your investment, and depending on it you take the calls. An investment without a goal is akin to a ship without a rudder.
Extensive cleaning exercise is undertaken before Diwali. In fact, it’s one of most vital rituals that happen before the festival. On similar lines, you must clean up your wrong investments and get rid of them at the earliest.
Note that holding on them can be detrimental for your portfolio and hamper key life goals. For example, if a fund has been performing poorly for an extended period, it’s better to filter it out and invest the proceeds in a better performing fund.
Similarly, if you feel you have purchased a wrong life insurance policy, use the free look-in period to cancel it, and in case this period has lapsed, surrender it or convert it into a paid-up policy.
Unfortunately, the festive spirit of Diwali is sometimes marred by incidents of fires and accidents. It’s vital to adopt caution while lighting diyas and firecrackers and have measures ready in case things go haywire.
Finance is no different. You need to be prepared for an emergency that can strike anytime in the form of a job loss, illness and death. You can guard yourself against them by building an emergency corpus and buying insurance. By doing so, you can easily keep your goals intact.
While Diwali is primarily the festival of lights, sweets, gifts and other stuff(s) make it all the more happening. These vital elements in the right amount ensure you celebrate a perfect Diwali. This diversification, when brought in investments can do wonders to your portfolio.
A diversified portfolio balances risks and rewards and makes sure you gain across market cycles. In the bull run, it adds to your gains and during bearish phases, protects them from getting eroded. So, avoid putting all eggs in one basket and spread your investments across asset classes.
So, this Diwali, inculcate these crucial lessons to make sure you are well and truly on your path to financial prosperity. Happy Diwali!
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