“The early bird catches the worm.” If one needs to become financially secure, they must start thinking about investments from the start rather than just savings. When I started earning I worked out a few tiny ways to build up my investments. Gladly, though they may sound nothing, these 5 little financial resolutions of mine are serving me a great deal. Without too much of stress and anxiety, these things will help you sort out your finances.

Let’s see, then!

My 5 Financial Resolutions

1. Start investing early

How early?

Probably, as soon as you start earning. It can be as little as a thousand rupees (Don’t think what difference would a 1000 rs make, you never know!) but it’s better to take out a part of your earnings for investing right from the beginning. This will get you closer to your financial success early. When we receive our first pay-cheque, we always think of throwing a party for our friends and buying gifts for our family members but along with that, we should also be able to save a little bit of it for investment. That will serve you greatly in the long term.

2. Put a cap on my monthly expenditure

And the second one of my financial resolutions is to be responsible for every rupee I earn, and every rupee I spend. With the usage of Debit and Credit cards, we always lose track of our expenditure which does not bode well with any investment plan. As for me, every month, I make the list of expenses I made for that whole one month and that way I can always go over what I have spent and if it’s actually needed. To make a strategic financial plan, one needs to be careful with his expenditure.

3. Make a new investment at the start of every year or more often

This is something I had in my mind even before I started earning. I thought this would be a great way to impart discipline and consistency into my financial strategies. So, every year I try to make a new investment in the month of January, if possible more often. It also helps me to stay focused the rest of the year to gather enough funds to invest next time.

4. Not to go for too much diversification

I always think too much of anything is bad, even too much of a good thing is worse. Diversification means investing in various asset classes and securities of many issuers in the hope to avoid the risk of losses. Ergo, I decided to go for a moderate diversification of my investment portfolio. Diversifying a portfolio out of proportions can vastly diminish the overall progress of the portfolio even when there is a great success in a fund. Quoting Warren Buffet, “Wide diversification is only required when investors do not understand what they are doing.”

5. Mutual Funds

For starters, one of the best and low-risk option for investment is a Mutual fund. You could go for high, medium, and low risk levels depending on your preferences. It definitely gives your investments a smooth start. But before you jump into it, educate yourself all about Mutual funds. Perhaps, these sites may be useful for you to know about various portfolios of Mutual funds, Investopedia & Edelweiss.

And lastly, the best pieces of advice I read and found useful are:

“If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.” – Warren Buffett

“Our favorite holding period is forever.” – Warren Buffett

That’s all. Those are the 5 of my little Financial Resolutions.

Lots of love,

Nikki.

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