Shooting for the stars

Don’t let the stars get in your eyes, don’t let the moon break your heart.

This lyrical warning sounded by an impassioned young lover to his beloved exemplifies life itself. We should be true at all times to people and ideas that we cherish in life. It is a promise and a commitment to those we hold dear. And our thoughts and actions must be in complete record, if we are to achieve our life goals.

An important area where we need to align our dreams and deeds is in the filed of personal finance. Most of you would have made some investments during the course of your working life. Are you sure they are in your absolute interest, immediate and long-term? Close to the half way mark of the financial year, take stock of your life and finances and realign your planning process to meet some of your most prized goals.

Financial planning is all about forward planning. In 2008, we have seen the best of times and the worst of times. Months after the Sensex hit a new high and a heartbreaking low, the equity market seems to have settled in a range and so have people’s nerves. You cannot look at the rear view mirror or be shortsighted by the challenges that confront the economy. If you are convinced The Wonder That Was India is now Incredible India, do not be the Cinderella who leaves her glass slipper behind at the midnight ball. When dawn comes, there may not be a Prince Charming knocking on your door and all you would be left with is the disappointment of a missed opportunity.

Life is a journey and before you embark on it, you have to finalize the destination. If you know where you are going, you can make arrangements beforehand, pack appropriately and take every step to ensure your stay is comfortable. Investment is like that. You need to decide your goals, prioritize your needs and take incremental steps to realize them. For every life goal, be it financial security, good health, child’s education or retirement, you need to book in advance.

The 5Ps of Pride and Prosperity
You want to protect your family from any eventuality, ensure a house above their heads, provide the children the best education and live your retirement years in comfort and harmony. The intention is fine but how many of you have created a roadmap to the future? What have you done to ensure a smooth journey down the uncertain path of life?

Financial Planning is the process of allocating savings to meet financial goals. Let us categorize these goals as Priorities and Pleasures. Though we are partial to the latter, our Priorities must always gain precedence, be it protection, progeny, property or pension

Protection
Every life is precious, every person irreplaceable. But things do not always go as planned. Death, disease or disability can strike without warning. You cannot be caught unprepared or without a contingency plan. Safeguarding your life and health is the smart strategy that you must set into motion at the earliest. You need to seize the moment and take the first of the many steps without any delay. Your family deserves the best at all times. You owe it to them.

Progeny
You love your children. They are your pride and joy. You want them to have the best of education and opportunities and will not spare any effort or expense to ensure they realize their full potential. You want to secure their future so they can fly free. Higher education, professional courses or unconventional careers, your children deserve every choice and chance. Money should never be an impediment in their life or in their growth. When it comes to children, nothing but the best will do. You are the only one who can make it happen.

Property
There is not a soul in the world who doesn’t want a house of one’s own. It is a dream and life goal; a big-ticket purchase that requires months of planning and years of salary. It is an exercise that requires zeal and patience and everyone who has bought a house would vouch for the satisfaction and accomplishment at the end of it. You do not have to wait a lifetime to live in your dream house. It is for you to transform an idea into an asset.

Pension
Retirement is an idea you want to implement in the thirties and reverse in the fifties. When you are young the world is for you to conquer. You live for today with no fear of tomorrow. But as more urgent needs take primacy, retirement planning is pushed to the backburner. It is not a wise thing to do. You should start planning for your retirement the day you start working so that you can reap the reward when you retire.

Pleasure
And when you have created a roadmap to the future, there will be no guilty pleasures but only dreams fulfilled. Sit back and enjoy your moments of leisure and indulge those ideas that you have been nurturing for a long time. Do what your heart desires, pander to your passions and find meaning in life. Go ahead, climb a mountain, sail the high seas, take an exotic holiday and spend a month teaching underprivileged children useful life skills.

Life Positive
Life is about following your dreams. Your happiness is as important as your responsibilities. Find a common ground and you will never have to trade one for the other. You can have it all.

The first step is to overcome the inertia and ignorance, and for some of you a fair degree of arrogance of outperforming everyone everywhere at all times. Get realistic, be smart and you will always be one step ahead of inflation, interest rates, economic cycles and euphoria. But always remember to align your portfolio to your risk profile and time horizon.

All of us desire a long life but our investment horizon is often short term. Many people keep postponing the investment process, waiting to accumulate a significant corpus before taking the first step. The point about long term investment is to get a start, even if it is a small one, allow that money to work for your and keep bumping up the amount to realize bigger goals. Remember, investment is about making life safe, meeting your life goals and maintaining your lifestyle. For a happy and happening life, your time starts now.