MONEY makes the world go round. Managing money is not on the top of everyone's mind — some do not think about it, others think that working hard to get the money is tiring enough — but even so, it remains just there: in the mind. Just because we use money as a unit of exchange for goods and services and start dealing with the physical currency early, some of us seem to think that we know all that we need to about money.
It's Time To Shake Off The Cobweb
With fast-changing regulations and intricately-woven global markets, there is a need to be continuously on top of the news — and be able to understand the implication of these on your personal finances to ensure that your money works as hard as you do. However, more often than not, we need a mistake to awaken us to the fact that money management is not as simple as it looks. Ask the CFO of your organisation today, and he will honestly tell you that he can handle the company's finances with consummate ease, but his personal finances are not in the desired state. The answer is not difficult to find: it is possibly easier to handle someone else's money, as the emotions attached are far less! (The products and the risks involved, and hence the skills and temperament required, too are vastly different.)
Men Are From Mars, But Do They Know The Way Back?
The key, then, is to find the right advisor to manage your money. Are you the overtrusting or gullible type? Or, are you inherently distrustful by nature because of your past experiences? In the former case, you need to make a mistake and only then learn to ask intelligent questions or do a detailed search before selecting your advisor. If you are the man who does not like asking for directions (which man is!), you are more prone to make the mistake and learn than women, who have it in their nature to compare and back their intuition. Lesson to be learnt: involve your wife or mother or sister in your personal search for your advisor.
Do It Yourself — But Always Err On The Side Of Caution
Sure, there are websites that offer free search and online tools to compare one investment option versus the other, but arguably only on a micro basis. Once I have decided that I want to invest in a bank deposit, I can compare where I will get the best rate. Mutual funds, too, have many research engines. But how do you decide what proportion of funds you need to allocate to equity, and within that to large cap funds? Sure, you can get a list of the best performing large-cap funds, but how many of them warn you that this is based on past performance only?
Neighbour's Envy: Take It With A Pinch Of Salt
We all are jealous of our neighbour or friend who boasts of his success in investments. Let me ask you a personal question. If you make 10 investment decisions, logically, you will get some right and some wrong. (Hopefully, more right than wrong.) Which of these decisions are you more likely to talk to your colleague about? Hence, do handle your "neighbour's envy" with a pinch of salt and follow a disciplined approach to investing.
Managing personal finances is for the long term. Get that drilled into your head and ensure peace of mind while you tick off the achievement of your personal goals one by one.
