I am back after a long hiatus, as I enjoyed a fabulous vacation in India. These are times when I can introspect and know myself better and deeper. Nothing to do with the spirituality of India, but just an opportunity to separate my mind from the daily rat race, and consider what is really important.
Like everything else, personal finance is also very personal. You got to know yourself thoroughly to understand how to restructure your finances, savings and investments to fit and serve your own unique needs. It cannot be driven by advertised claims from pundits, or hyped up investment professionals.
There are several occasions when I made the mistake of trying out something which did not fit my personality or immediate goals. It was just giving in to the popular notion of what I should be doing, without thinking twice about it.
Once I was nominated or elected for a post in the HoA (Homeowners Association). While the work or responsibility was not very complex, but the surrounding politics and conflicts required a lot of different people handling skills. I utterly failed in this endeavor and quickly realized that it is not for me. I have better things to do and spend my time on.
Similarly as I read more on Real Estate Investing and the numerous strategies, I wonder is it possible for everyone to jump in and spend so much time or build such skills to be successful? Or is it better to stick to your own vocation and invest passively, thereby spend your valuable time doing what you can do best. This will also increase your income and put you through a better path to success. This is of course provided you like your job and not desperate to get out of the 9-5 routine.
Some of the investment avenues that people jump into without much education or risk analysis.
- Direct stock investment
- Real Estate investment
- Life Insurance coupled as investment
- Exotic Art and collectibles
If you are like me, who likes to keep things simple outside his area of expertise – here is a no-nonsense investment plan.
- Try as hard as you can to stay out of debt. Create a budget to track your income and expenses and live within your means. See the post: Budget – Grow the tree upside-down
- Maintain an emergency fund and create a cash cushion. See the post: One essential comfort zone
- Invest in simple Index Funds and create a goal based portfolio. See the post: Investing in the High Five portfolio
- Keep emotions under check and have a realistic plan. See the post: Emotional Investing
- Last but not the least, Get Started. See the post: Shun that perfection
- Use the following tools to get started. See the post: The Starter Kit
Finally invest in what you understand fully and comfortable in dealing with.
Rest everything can be ignored and continue a stress-free financial journey.