7 MinsMay 21, 2020
As thousands are adopting healthier lifestyles propelled by the Covid-19 scare, it is also an excellent time to adopt practices that boost your financial health. This might sound counter-intuitive, especially because of the economic hardship caused
by the pandemic, but the fact is that it is in these tough times that you need to stand firm. The good part is that the rules governing maintaining of health and long-term wealth creation are quite similar.
1. Be disciplined: As you need the discipline to exercise for half an hour daily, you need the same for continuing with your SIPs (systematic investment plans), even if the market
has turned volatile. Sure, the Sensex has fallen over 20% since the beginning of March due to the pandemic scare, and your funds may be showing negative returns for the last couple of months. But this is the right time to stay invested since
the fund managers now have the opportunity to invest in quality stocks at lower valuations.
2. Set goals and work towards them relentlessly: Working towards a fixed goal makes it easier to achieve your targets. You would work towards losing weight through a combination of exercise and diet control; the same goes for
financial goals. If you invest just Rs. 10,000 per month into investments giving you 10% return annually, at the end of 30 years, you would have a corpus of over Rs. 2 crore. The longer you invest, the better the power of compounding works
in your favour. Spooked by market volatility, if you stop investing after say the 12th year, your corpus would be only Rs. 26 lakh.
3. Practice self-control: If you binge on gulab jamuns, you will have to work extra hard to burn the calories. Similarly, if you splurge on your credit card on impulse purchases, you will have to pay interest around 3-3.5% per
month to service your credit card debt (if you revolve the credit), which is a costly proposition!
[Also Read: Why you shouldn’t lose sleep over equity losses due to coronavirus]
4. Have patience: You can’t develop six-pack abs in a day. Neither can you make a quick killing in the stock market. Acquiring a good physique and creating a retirement nest egg, both require years of hard work. Be wary
of investments that promise high returns in a short period. Keep your expectations realistic and give sufficient time for your investments to deliver returns.
5. Learn to prioritise: What's more important? Eight hours of sleep or a party every other day? Similarly, do you want to make a down payment on your home in five years or is that trip abroad so important now? Learn to differentiate
between your various financial goals and plan your savings and investments accordingly. For instance, paying off your home loan before time will reduce your monthly
EMI burden and then you can pay for your foreign trip without having to resort to borrowing or overspending on your credit card.
Taking care of your health is a simple process – balanced diet, daily exercise, regular checkups and other preventive steps. The road to wealth creation is a similar process – set goals, invest, don't over-borrow and repay on time.
Disclaimer: This article has been authored by The Source, a Mumbai-based content creation and curation firm. Axis Bank does not influence the views of the author in any way. Axis Bank and The Source shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.