We promised to bring you the Chapter#2 of the Why Investing is easy but in the interim, Government published the Interim Budget and I think its reasonable that our readers expect us to write about it and we write about it. So Chapter#2 can wait... Here's the News from the Interim Budget.“If it ain't broke, don't fix it.”
The Government has not done much mumbo-jumbo in the budget and there is hardly anything for middle class as such. Things look far better now than they were in the past and good thing is Government not trying to tinker things, that are working fine, just for the sake for some "Budget-drama". Where does that leave us? If you have been reading our budget blogs, you will appreciate the fact that we always want to give a personal touch to what the take aways from the Budget!
Take Away# 1
Fix it if its Broken
This is so much in contrary to what the Government has done with the Budget but gives a very important cue to something that is so true in most of our financial lives - Broken. As hard as it may sound, it is true. When we say Broken, we are not even eliminatiing people who already are saving a good amount of their Incomes. So please dont ignore if you are simply saving a good portion of your money, even you can be broken. So when we mean broken- We are talking about those that -
- Dont have savings at all or below 30% of their Income
- Dont have a insurance to cover their Life and/or Health Contigencies
- Those that have wrong Asset Allocations (high amount of savings in only one of these - Gold/Real Estate/Equity without a proper thought process)
- People who are greedy about making higher returns and repeatedly commit their monies to products that have high burn rate.. Like Stock Market Trading, Spurious Plans promising very high returns, Cryptos n so on.
- Having too many Life Insurance Policies that yield Zero Real Returns.
So think about the above broken things/Habits and fix it as soon as possible so that the Take Away#2 matters.
Take Away# 2
Interim Reviews
A lot of us might have already done a course correction about things mentioned in Take Away#1 but every now and then you need to re-look at your wealth and measure if you are on track to achieve the objective that you set out for or have you lost the very need why a certain investment decision was made. These Interim reviews will help to weed out the un-needed and also plan for short term contigencies better. Just 2 Examples here -
The 1st Definite-
Lets say we expected a X% of Increment and planned a thing or two but the actuals might be higher / lower than our expecations. An Interim look at your Wealth Plan helps you to do a better re-allocation of what needs to be done rather than being reactive and hashing up and jeopordizing the long term goals. Creating a mental idea of what you are going to do with money that you will get in future (Higher/lower) always helps in avoiding a lot money mistakes.
The 2nd Indefinite-
When we set out with an investment plan, situations are different and now they are different but because we dont take time to sit and think about it, we are just reactive to most of them. So Irrespective of the money that will or wont come to you in future, always take time to sit and think about what money has done to you over the last year. This will help you in understanding money better and once you understand it better, your usage gets better. Also you will appreciate that fact that money alone does do nothing.
Repeat the Interim Reviews with the 2 Take Aways for a few years then you will realize why it is such a important take away.
It is all it is with the Interim Budget! Await to write to you in July 2024 when the Full Budget will be done and until then,hope to hear some fascinating stories from you about about how Interims have helped :) For now, On to Chapter#2... Happy Sunday!
For any financial Planning queries, Please contact Droplet Wealth at invest@dropletwealth.com.
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