I won’t let money lie in the savings bank account. It makes no sense. It loses value as inflation rates are higher than the meagre interest that it makes. But as I ponder over my choices, and worry about investing in the wrong thing, money simply lies there. I shall act on those balances and have them invested promptly.
I shall not allow the laggards to ruin my portfolio. I might hope that these poor picks will somehow get carried up in a tide that shall come someday. But they stand there, as stark reminders of my investment decisions gone wrong. It is important to release the money that is locked up in these losing propositions. Cleaning up the portfolio and starting afresh is the mantra.
I shall take the time to make an investible list. Instead of trying to figure each time about where I must invest and what I should choose, it is easier to make a list at the start of the year. A few funds with good track records, a few stocks, and some target amount for deposits, bonds and debt funds. That should do. Call it asset allocation if you wish, but that list is critical. So I swipe money out of the saving balances and invest it promptly without doubts.
I shall hold back from the temptation to try new things. Most of them are traps of some kind. I invariably realise it after I have succumbed to the temptation to try what I thought was a novel idea. Or buy a stock that everyone seems to love and like as it makes a debut. While investing, the best test is offered by time. As an investment proposition ages, its quality is starkly visible. Buying into an aged fund that has seen ups and downs, or a stock that has weathered through market cycles is a much better bet. I shall hold back the temptation to discover the next big thing and be first in line to grab it.
I shall not be tempted by stories about real estate and take another home loan to buy a property I shall never use. I shall remind myself that the real estate market is quite a dirty game, played by corrupt operators with a callous attitude towards the rule of law. It is not a place for the noble-minded. The rental yields are too low and selling is a nightmare. I shall steer clear of the urge to sign up for real estate deals that tempt me
I shall take the time to identify good causes that need money and devote serious time to take these ideas to like-minded friends. Many are willing to donate but remain wary about how the money might be used. Knowing that a friend has done the background check, and taking comfort that others like them are also contributing, encourages many to come forward to donate. I shall build those bridges to get money to flow into worthy causes I know and care about.
I shall recognise that casual engagement with investment ideas is dangerous to my financial life. The temptation to follow a televised show; to act on a WhatsApp forward; to get interested in a tip that floats at work, and to make an impulsive call based on a conversation with friends are all callous attitudes to money and investment. None of these ideas has been multi-baggers in the past to give them any credence. These are just floating around for attention. I will treat my money with a great level of respect.
I shall recognise that the urge to spend or to assign a specific use for money is harmful to my impending retirement life. Even before a bond matures, I have a plan to divert those funds to remodel the kitchen; I have to add to that gold saving scheme and buy a solid and expensive ornament; if that SIP is over, I review the money accumulated and ask myself if time is ripe for a holiday. Every large accumulated sum seems to call out for a plan, so the power of that amount can be diverted to some long-postponed consumption. I must keep my focus on saving. Reinvest is the mantra.
