FIND A MISSING PIECE IN YOUR WEALTH-BUILDING PUZZLE

The requirement to create enough money to be able to live your dreams continues to give sleepless nights to most people. We are living in tough times today where our needs continue to increase exponentially but quite often, matching resources to be able to fulfil such needs, are always that much short. The obsession becomes stronger for those with receding hairlines and increasing waist lines. Yes; these are natural, unmistakable signs of ageing and the very thought of retirement and the challenge of being able to maintain if not enhance your status and quality of life begins to bother you. With advancing age also come challenges like health issues and the inevitable rise in inflation that threatens to keep your purchasing power just that wee bit behind your aspirations. You spend years planning your finances; many a times realizing much later that your decisions perhaps had many flaws to start with. Now isn’t this a good enough case to take stock before it is too late and find that elusive link in your Wealth-Building Puzzle?

Invest wisely

The key to success lies in being able to invest wisely without letting your gambling instincts guide your decisions. Making your money grow without hiccups can be related to a walk through a virtual minefield where one wrong step could spell disaster. There are different methods of assessing risk-reward ratios and what applies to one investor need not necessarily be the ideal choice for another. You also have to understand the statutory advice connected with most investments that tells you that, “past performance is no guarantee for returns in the future; study the offer document carefully before investing”. It also pays to be aware of the fact that all types of investments have their up and down swings and often at times when investors are not anticipating them.

Understanding risks

Surely, somewhere down the line you would have heard the popular advice, “Do not put all your eggs in one basket”. Now this simple advice clearly tells you to spread your investments over different options so that you strike an acceptable balance. Options available are many and how much to bet on which would depend upon a host of factors; the prime ones being your financial goals and the ability to absorb risk. Another golden rule to be remembered is that all asset classes have their own good and bad cycles and an investment in either which was considered the in- thing to do at a given time, may not be a panacea for all times.

Avoid emotional attachment

Many get emotionally attached to their investments. It is common to see investors fall short of making great returns on their investments as they fail to grasp the appropriate time to sell. While long term investments generally give handsome returns, one has to ride many ridges and troughs along the way to take your profits home while you are still in the green. Most people do manage to have a fairly diversified basket of investments over the long run; the missing piece in the puzzle could well be their failure to decide when to say goodbye to something that could land up becoming a liability.