I reflected on my past experiences to scout for an answer to the above question. From nearly a decade’s experience in the financial planning profession, I could identify a pattern of the common pain points of clients, the financial mistakes being made, spending habits and their general behavioural approach towards money.
98 per cent of the people I get to interact with usually focus on investment returns. Returns is one of the most important criteria, rather, the only important thing on which investment decisions are based upon.
But the ONE THING that actually matters to achieve financial security in life is Financial Goals. They so meaningfully connect the bridge between what you earn and what you need or want.
Refer to the images above. In the first image, the inner circle is the core thing which most people get it wrong. The focus is on returns and buying investment products to build wealth. People haphazardly invest to fund their needs and wants at the near time of requirement without much thought. The chase for high returns never ends and eventually people are clueless about whether the money accumulated is adequate or not. In the second image, the core focus is on attaining financial goals. Once these are defined, it becomes clearer as to when is the money needed and how much is required through planning. Such goal planning inspires investment action in the right direction. People who follow this circle have higher chances of attaining financial freedom. Because they know where they want to reach.
So, do not think about the best ULIP or the best mutual fund or the latest IPO or the latest hot stock tip. Do no think about saving tax products. Forget the stock market noise. Narrow down your focus sharply to the ONE Thing. Your Financial Goals. Think hard about how you want to spend your hard-earned money. And financial priorities will become crystal clear to you. Works well if you grab a pen and paper!
No matter what profession you are in, no matter how much you earn. And doesn’t matter what your financial and family situation is right now. Apply this concept of ONE thing of focusing and attaining your financial goals. I can confidently tell you that if you do this ONE THING steadfastly throughout your life, you will always have the money in your hand when required. Eventually, you will be working for money because you want to, not because you have to.