Deepavali, the festival of light, is one of India’s biggest festivals. The festival marks the return of Lord Rama after defeating the demon King Ravana.
We start our Diwali festival with offering our prayers to Lord Ganesha for welfare and prosperity and Goddess Lakshmi for wealth and wisdom. All the positive qualities that you may find in the universe emanate from her. She is the source of all forms of wealth. At the physical level she is strength, material wealth, beauty and grace. At the mental level she is peace, happiness, positive attitude, and inner harmony. At the spiritual level she symbolizes, selflessness, kindness, discipline and selfless service.
New clothes, sharing sweets and lighting up our homes – The Diwali mode is on! But are you aware that the festival of lights also offers few valuable financial planning lessons of life. Let’s understand them.
- Advance Planning
Diwali is the most awaited festival in our country. Every family plans their spending – Clothes, gifts much in advance. However, most of the people fail to carry the same when it comes to managing our finances. Most of the people often fail to understand the benefits of planning their finances of their life. By investing at an early stage with a set goal in mind we can make our money work for us. We can achieve our goals such as a peaceful retirement, international vacation, children’s education, lavish weddings, etc. in a seamless manner.
- Review your portfolio
Cleaning our home and office before Diwali has become a yearly ritual we all follow on Diwali. With a similar approach investors should also review their financial plan atleast on yearly basis. Periodically monitoring your investment portfolio makes sure that your investments are in sync with your financial goals
- Light the lamp of knowledge
Diwali celebrates the victory of good over evil, light over darkness, and knowledge over ignorance.
New skills, new hobbies, some investment management knowledge and new languages – all these things can come in handy at some point of time in your life if you learn them and grasp them correctly. The earlier you learn them, the better you can get at them. This Diwali kill the ignorance under you and start accumulating more knowledge on different financial planning aspects. As it is your hard earned money, you should know at least the basic of investment & planning. This will surely help you in long run. In today’s competitive life style financial planning is becoming a basic need of every family.
- Prevention is better than cure
Diwali crackers creates a different energy altogether, however, with the thrill comes the dangers too. While buying crackers we categorize them on how hazardous they are .The less hazardous ones are usually what we purchase for our children. Drawing parallels from the same, when we bring ourselves to investment, we should invest as per our Risk profile. Investors with higher risk appetite can invest in mid and small cap while one with low risk appetite should stay away from it. Blindly investing in any financial product that seems lucrative can lead to financial disasters.
- Behavior Trap
I am sure you were waiting for the Big Diwali sale. As the festive season begins, everything you want and don’t want is available at ‘unbelievable’ prices-from electronics to automobiles to home furnishing… the list is endless. You find it difficult to resist the urge to buy the products you like but you don’t really need. Thinking through before any purchase decision makes you a frugal shopper. However, this doesn’t mean that you should be stingy and never buy. It only means that your purchase should justify your hard earned money.
In a similar manner when it comes to investing avoid taking emotional decision. Make sure that your investment decision are not affected or based on investment bias like Recency, Familiarity bias.
This year on the beautiful festival of lights let’s decide to enlighten our life, by planning for each major events of our life. A strong financial plan includes crucial factors such as safety, planning, diversification, and the most important Peace of mind. This Diwali maximizes your celebrations with proper financial planning that would enable you to have a safe, secure and satisfied future.