Success 2020: Ordinary steps, extraordinary results
Read in: 3mins, Published On , 26 Dec 2019 By TT Connect
The path to your future wealth is pinned on your resolve to do better. If you do not follow your resolutions each year, you knock off a chunk of your future wealth.
Reasons why New Year goals don’t work out
Setting unrealistic resolutions
While you can become a crorepati in the long run by investing your money, expecting to achieve this just in about a year or two is unrealistic.
Having no plan
Being ambitious about your goals does little or no good if you don’t have a sound plan in place.
Having no time
You may have realistic goals and plans, but may not necessarily have the time to execute the plan. The lack of time for investing may stop you from achieving your goals.
Having no guidance
Despite having clear goals, the plan and time, you may not be very confi dent about your moves. In the absence of proper guidance, you tend to go off the track.
How to achieve your New Year goals
To achieve your goals, first, break them down into these ordinary steps:
List out all your goals in a smart, practical and achievable way Goal: Vacation to Bali
5 days & 6 nights
Do this exercise for all your goals and convert them from ‘dreams’ to concrete goals.
Step 2: Set priorities for each goal and club them into Goal Buckets to manage them easily
A visit to Bali in 6 months, would be a short-term goal, a trip to Disneyland in the next 3 years would be a medium-term goal and World tour in 8 years will be a long-term goal.
Step 3: Invest for these regularly
The following table explains how you can invest to achieve goals spanning different time horizons.
3 or less
Where to invest:
Debt Mutual Funds
3 - 5
Where to invest:
Hybrid Mutual Funds or ELSS
5 or more
Where to invest:
Equity Mutual Funds
Risk Managed in the long term
This brings us to figuring out ways to save up for these goals. And one of the most effective methods would be - Weekend Investment Plan (WIP).
What is Weekend Investment Plan
WIP or Weekend Investment Plan is an investment strategy where you renounce a regular expense and direct that amount towards investments. There are lots of every day scenarios where you can apply this strategy to increase your investments. For example, if you eat at good restaurants every weekend with your friends or family, you can consider skipping it once a month. Do you watch a movie every Friday? Skip a week and use the amount to invest for your future. Here’s how you can do it:
Set a realistic goal Say, you want to renovate your house and it would cost you Rs.3 lakh. A realistic goal would be to achieve this in 3 years and not the next year.
Implement WIP Now as per the WIP, skip 1 out of 4 weekend plans. You can then invest that money in Mutual Funds through a Systematic Investment Plan.
Start a SIP You can start a SIP online in just a few steps. With SIPs, your money will automatically get deducted from your Bank account at a predetermined date, every month, and get invested in the Funds of your choice.
Watch your money grow Mutual Funds are handled by professionals. So, you can just sit back and watch the power of compounding and rupee cost averaging multiply your money.
Thus, with the WIP, you will not only have money for your goal but also have extra money for entertainment and leisure.