HOW YOU COULD INVITE FINANCIAL DISASTER

1. Being Financially Illiterate .

If you start driving a car without fast learning how to drive, you are bound to cause accidents. If you play any game without proper practice, you are bound to lose. If you swim without knowing how to,you are bound to drown . So is the case with your money matters too . You are bound to lose money if you do not have the right knowledge, if you have not learnt how to manage money, if you have not learnt how to spend money or if you have not learnt how to invest money. The problem is that some of you think that money management is easy. So why should you spend time and money to learn it ? The end result is that most mistakes......time and again . of you remain ignorant about money and make

2. Being Egoistic
Never believe that you are always right; dont let your ego override your mistakes. If you readily admit that you made a wrong investment choice, you can limit the damage. The more you delay, the more could be your loss. Even the best financial experts make mistakes. Only those who accept their slip-up, learn their lesson, get up and get going succeed . However, historically it is seen that many of you will not sell your losers. You will not be prepared to book a loss. You will hope against hope that things will improve . But this generally does not happen. Over time, such investments will further erode in value and may eventually turn worthless . Don't be under the impression that you know everything. The moment you think so, your learning stops. our mind stops being receptive to new ideas, new ways, new products and new risks . Change is the nature of life . Always be aware of new opportunities and threats.

3. Being Greedy .
Someone assures to double your money at the stock exchange in quick time and you give him the money. Some company offers you high interest rate and you waste no time in investing with it . Somebody promises you the moon and you fall it . This is nothing but plain and simple greed! You want something more than what is realistically feasible. But have you ever pondered even for a few minutes Why will someone give you the key to big money? Don't you think any sensible person would himself make all the

money rather than hand over the goldmine to you? And for what? A measly commission! Well, if you don't understand this simple logic than no one can help you. Be ready to become the next victim of some smart fellow. Be ready to lose your money, but than don't crib about it .Your greed is to blame. Dont you read about countless such cases? Don't that teach you to be a bit more cautious?

4 . Being Fearful .
Driving on the road is risky, but that doesn't mean you will not drive at all. Breathing polluted air is risky, but that doesn't mean you will not breathe at all . Similarly investing is risky, but that doesn't mean you will keep all your money under the mattress. Besides, you can't learn driving or swimming or playing a game, just by reading a few books. You have to test-drive,you have to test waters. You may get hurt a few times, but if you are doing it under proper supervision, it will be a manageable pain. In fact, this little pain during learning is better than the big pain later if you remain ignorant. Avoiding risk will not do, risks have to be managed. For example, people fear equity. That is why you will find less than 5 % of the India's investment in equity. But, if you think carefully, you will realize that the risk is not so much in equity per se,but more in how you invest in equity. You invest in equity by way of hot tips, you invest a lump sum money in equity, you invest when the markets are high and sell when the markets are falling, you invest in cheap, penny stock rather than good companies in short, everything about your investing is flawed. So naturally, you will lose money and than wrongly blame equity for this .

5. Being Carefree .
If you only for today , than you are putting your tomorrow at risk . If you don't save for tomorrow, how will you pay your children's school married? If you don't save for tomorrow, how will you get them married? If you don't save for tomorrow, how will you meet your medical expenses? If you don't save for tomorrow how will you live after retirement ? These are not hypothetical situation. These are real life issues. You, therefore, need to plan for them today, If you don't want to suffer tomorrow. In fact, not only you suffer, but your family too suffers. The mantra is simple : plan, prioritize and prosper . No doubt, this is all common sense.Nodoubt,you would have heard it umpteen times before .But the fact of the matter is that,despite all this common knowledge , many people live a carefree life . No goals mean you aren't getting anywhere useful; no road- map means you aren't using resources judiciously; no savings mean you are sitting on a volcano, ready to erupt .

6.

Being Uninsured \ Underinsured .

Calamities can strike many forms: - Natural calamities such as floods, earthquake. - Medical calamities such as accidents, terrorist attacks. - Death . - Job loss. And, more often than not, these will have serious financial impact. many people have lost their homes, their entire saving and even their future incomes . There is no knowing who would be next victim (s) of such tragedies. There may be no protection against destiny. But you can definitely protect you and your family from the financial implications. Life insurance, accident insurance, medical insurance, household insurance , etc . are all available today . Besides. these are not expensive. They will not dent your pocket much . But in times of crisis , they will provide essential succor .

7. Being Over Indebted .

Debt is a burden. You all know this ! More debt means more burden. Thats logical! Therefore, if you are not careful about borrowing money, you could be in for some serious trouble. In fact , it is not only important to be careful about how much you are borrowing, but also about what you are borrowing for and how much you are paying for it . If you are borrowing to buy a house , that's alright.But if you are borrowing too much such that all your saving are exhausted and your monthly EMIs take away most of your net take - home pay , that's not ok . If you are borrowing to go on a holiday abroad , that's not alright , even if you can easily afford the EMIs later .

8. Being A Herd - Mentalist .

Are you investing in the shares that your friend is investing in? Are you buying the same mutual funds that your colleague is buying? Are you buying gold just because your neighbor bought too? In short - are you doing what others are doing?

If your answer is yes, than you are committing a big mistake. Do you own the same assets as your friend? Do you have the same liabilities as your colleague? Do you have same financial needs as your neighbor? Is your risk bearing capacity same as your friend \ colleague \ neighbor? No! This is usually not true. You have a unique financial profile. So, it necessarily follows that your investing strategy also has to be unique . You cannot just follows the crowd. If you do, you are bound to buy wrong products, which could lead to huge losses. Sure there could be some overlap, there could be some commonality but - overall, you are different and so your portfolio should also be different . Besides, given the poor level of financial literacy, the herd is most probably wrong. So you can well imagine your fate , if you are following them .

9. Being stingy About Advisors Fees

You would find this phenomenon quite common in India people will be willing to pay their doctor, lawyer or CA top notch fees but when it comes to the financial advisor, the opposites happens. Forget about paying fees to your agent to advisor you would in fact ask him to return a portion of the commission that he earns. In this scenario, if you expect unbiased and honest financial advice then needless to say that your expectations are highly misplaced. Would you spend your time and effort for free? Would you share you specialized knowledge without expecting something in return? Its highly unlikely! As someone has very rightly said There is no lunch for free, or rather there is no good lunch for free. So the choice is yours. If you want good advice, you have to pay for it. You opt for free advice and you will indirectly pay much more through wrong / biased / dishonest advice.

10. Being Too Innocent

The world is full of dishonest and incompetent people. It is sad, but then thats the fact of life. Therefore, you cannot afford to be gullible about your money matters. Too much innocence and a too trusting nature could prove to be an expensive mistake. One can understand others taking you for a ride, but it is not uncommon to be duped by even friends and relatives. So, unless you are careful about whom you are consulting, you could be in for a rude shock.

Sure, given the complexities involved, you will need to consult experts from time to time. But that doesnt mean you have to follow them blind folded. You should have at least the basic knowledge to distinguish between genuine and fraudulent advice.

For Further Details kindly Contact: Thanks and Regards, Kirang Gandhi Independent Financial Planner www.fpindia.in M- 9028142155